After receiving a securities fraud cease and desist last Sunday, Genesis Mining has finally issued a public response.

Being the responsible company that they are, Genesis Mining have announced they’ll register their securities offering with the SEC and operate legally in the US.

Nah, this is crypto baby.

Genesis Mining’s response to the South Carolina cease and desist is to comply by ceasing to offer unregistered securities to residents of South Carolina.

Outside of South Carolina Genesis Mining has committed to continue to illegally offer unregistered securities across the US.

Rather than address the issue by registering Genesis Mining with the SEC, CEO Marco Streng has fallen into the trap of framing cryptocurrency and securities regulation as an issue with technological innovation.

Crypto is still in its infancy and for the industry to continue to grow, the community must view regulators as partners in our shared objective of fostering responsible innovation.

Along with our US and global legal teams, we will be engaged in a range of government outreach initiatives over the coming months to collaboratively determine a way forward.

We firmly believe that the regulators intention is to ensure consumers are protected, and we commend them for this.

Our intention is to ensure that innovation is not stifled and we and other pioneers in the industry have a clear and compliant path to operate in as the industry continues to evolve.

To be clear, the South Carolina cease and desist does not ban cryptocurrency, cloud cryptocurrency mining or Genesis Mining’s current business model.

The Securities Board has simply informed Genesis Mining it is illegally offering securities and given them thirty days to comply.

There’s nothing stopping Genesis Mining from registering with the SEC, however instead the company seems intent on lobbying the US government for an exemption.

If Genesis Mining is a legitimate cloud mining operation, why they don’t just register their investment offering with the SEC is unclear.

SEC registration would require Genesis Mining to disclose information about their purported mining operations to US regulators and the potential investors.

Among other things, this would see Genesis Mining provide timely third-party audited accounting reports, as well as specifics as to their purported mining operations, revenue generated via said mining operations and use of this revenue to pay customers.

With that out of the way, Genesis Mining’s current business operations could continue in the US without issue.

Again, why Genesis Mining are refusing to comply and instead continue to operate illegally outside of South Carolina is a mystery (South Carolina securities law is not materially different from federal securities law).

Despite the potential for other states to issue Genesis Mining with a securities fraud cease and desist, or the SEC at a federal level, Marco Streng maintains

Genesis Mining is here for the long term and will continue to operate as the market leader.

Despite what “Dan from the office”, “Dan from Reddit” or “Dan on YouTube” might claim, The US Securities Act has been around since 1933.

Cryptocurrency investment opportunities are simply a new vehicle to offer securities through.

These include mining, trading, arbitrage services etc.

The issue, with respect to securities law, is not the technology used to offer an unregistered security, so much as the offering of an unregistered security in and of itself.

Be it fiat, cryptocurrency or an investment scheme tied to your uncle’s belly fluff, if you’re soliciting investment on the promise of a ROI (implied, guaranteed or otherwise), you’re offering a security.

The US has established regulations in place to protect consumers from unregistered securities offers, and cryptocurrency or any other technological innovation is not exempt.

And rightfully so, because under the technology is the same fundamental principle that governs securities regulation as a whole.

That is investors investing money on the expectation of a passive ROI.

I suspect the effort and money Genesis Mining are going to waste trying to convince the US government cryptocurrency securities should be exempt from regulation, would be far better spent on working toward being the first cryptocurrency company to offer full transparency and operate legally within the existing securities law framework.

In the meantime, if all the “Dans” of the internet could cease and desist from misinterpreting this a technology issue instead of a securities issue, that’d be great.

All you’re doing is pumping misinformation and, dare I say it, FUD into the cryptocurrency space. And that’s not helping anyone.