Regulators in the U.S. states of Texas and Maryland have issued emergency cease-and-desist orders to a cryptocurrency mining company that touted its donations to COVID-19 relief efforts as part of its sales pitch.
Ultra Mining, according to the Texas State Securities Board (TSSB), had offered would-be investors the chance to double their money via the purchase of mining capacity. It also boasted an affiliate marketing program for participants.
One element of the company's pitch, according to officials, is the claim that it has donated $100,000 to UNICEF, a U.N. organization that provides humanitarian aid to children, in order to purchase medical equipment for those fighting the coronavirus pandemic. "Ultra Mining, however, refused to provide any information that verifies the donation, according to the order."
The firm also allegedly colored its pitch by playing to the current economic conditions.
"Ultra Mining is also running what amounts to a recession special, according to the order. It is offering new investors an extra 30% of purchased cryptocurrency mining power for an initial deposit of $10,000. The reason? 'Hard times' in the economy, according to the order," the agency said.
According to the TSSB, "Ultra Mining has 31 days to file a notice to challenge the Texas order at the State Office of Administrative Hearings."