Cloud mining has gained immense hype in the mining world and that too for a special reason. People are turning to cloud mining because it eliminates the need to maintain the miners. With the help of cloud mining, the capacity can easily be bought from the data centers that are explicitly set up for mining the digital currency.
Cloud mining is equally popular in South-Carolina, and the mining operator Genesis Mining has a stronghold in the region. There are many other cloud mining companies also that are ruling the roost in this region, and one of them is Hashflare.
However, things are going to change now. On 9th March 2018, the Attorney General of South- Carolina has just issued an order to Genesis mining to stop targeting the residents of this state. There are genuine reasons behind this order that need to be stated here.
The way Genesis Mining operated was that it sold its particular contracts through its specific site. What needs to be mentioned here is that Genesis Mining was not alone in its mission. Swiss Gold Global had also joined hands with Genesis Mining.
What Swiss Gold Global did was that it sold the contracts on Genesis Mining’s behalf. The problem is that Swiss Gold Global is not currently registered as a broker in South-Carolina and this is why things messed up in the first place.
If a broker is not registered, then this is basically an illegal activity. The reason is that the cloud mining contracts are investments that represent the securities. Currently, South-Carolina is following one simple rule. The rule is that the investments that are made to acquire profits are considered as securities.
All this action has pushed the mining companies into making some extreme decisions. Most of these companies are not keen to register with the SEC. This is why they have to make sure that they avoid the US investors in the first place.
Recently, a project was launched by the name of Moonlite in Iceland, and it has already taken the initiative to avoid the US investors. The US investors are not given the opportunity to participate in the token sale of this project.
This solution may work on a temporary basis for some of the mining companies, but practically it is not possible to push away the US investors from token sales as the US is one of the potential economies of the world.