Bitqyck to undermine US securities law with “international mining”
To hear Bitqyck affiliate Scott Brewster tell it, cryptocurrency mining is illegal in the US.
[18:00] The North American structure, the government and the laws and everything, makes it difficult to impossible to pay miners for introducing mining to other people.
What Brewster is referring to is the offering of an unregistered security, which is of course illegal in the US.
Within the context of MLM cryptocurrency mining, affiliates invest funds with a company and receive a passive ROI, purportedly generated via cryptocurrency mining.
There’s nothing illegal about it, provided the company registers its securities offering with the SEC and is 100% transparent about generated mining revenue.
For some reason Bitqyck don’t want to operate legally in the US though and instead, according to Brewster, plan to offer unregistered securities via Asia.
BehindMLM reviewed Bitqyck a year ago and at the time there was no mention of mining as part of the business model.
Attached to Bitqyck is the bitqy altcoin.
Shortly after launch bitqy pumped to 6.5 cents in late October. It has crashed to around 0.4 cents (less than half a cent) over the past few months.
First announced around July, Bitqyck sold cloud mining to US residents for $1000.
This appears to be offered mostly in secret. Even today if you visit the Bitqyck website there’s still no mention of bitcoin mining.
But apparently not for long, as according to Brewster Bitqyck has worked out how a US company can offer unregistered securities.
[18:18] So we, Bitqyck, looked and thought, “OK we can’t do that (offer an MLM mining opportunity in the US).
So let’s operate (Bitqyck’s existing opportunity) under the Bitqyck umbrella, and let’s move to Asia and operate (mining) under a completely separate umbrella.
Completely separate ownership. Completely separate everything.
And have that (Bitqyck) over here and we have an international mining organization.
Brewster goes on to state US Bitqyck affiliates themselves won’t be able to invest (*coughcough* VPN *coughcough*).
While that goes some way toward compliance, offering and promoting unregistered securities for financial gain (referral commissions), even to non-US residents, is still illegal.
Bitqyck is a US MLM company run by US residents. At the time of publication Alexa estimate 74% of traffic to the Bitqyck website originates out of the US, so it’s safe to assume the majority of their affiliates are in the US too.
US residents running a US company setting up a shell company in Asia to offer an unregistered security through is pseudo-compliance.
It’s not going to fool the SEC should they investigate.
None of this however seems to phase Scott Brewster, Bitqyck or the company’s owners.
According to Brewster, as of March 2nd Bitqyck co-founder Bruce Bise is
[18:53] working on a replicated site for the Asian launch.
So when you speak to somebody in Spain and they sign up, you’re going to give them a different replicated site than Bitqyck.
That’s coming here in the next day or two.
Bitqyck intend to charge non-US affiliates $3750 for a bitcoin mining investment position.
Half and quarter investment positions are also available, for respectively half and a quarter of $3750.
[21:57] Nobody is putting more bitcoin miners into the global miners into the marketplace than we are in the next two months.
And nobody is going to have the net-results that our machines have in 2018.
With respect to Bitqyck affiliates promoting the mining investment positions, 20% of the ROI generated from the position “goes into a compensation pool”.
[22:43] Guys, understand this.
You’re in America … you talk to your friend in Thailand and they get a machine … and they’re loving it.
So they tell four or five friends and those friends tell four or five friends.
Your friend starts to mine bitcoin. When they mine bitcoin you get 5% of everything that machine does.
So in a nutshell, a US Bitqyck affiliate convinces others to invest in an unregistered security and they receive 5% of the ROI payout.
If they convince five or more Bitqyck affiliates to invest, the ROI commission rate is increased to 10%.
5% is offered on the second level of recruitment and if a Bitqyck affiliate qualifies as a “Gold”, they receive a 2% ROI commission down seven levels of recruitment.
There’s also a Matching Bonus on ROI commissions earned available to Platinum ranked affiliates.
Brewster goes on to suggest that US Bitqyck affiliates meanwhile shouldn’t feel left out because they can’t directly invest in mining positions.
By convincing others to invest, Bitqyck rewards US affiliates with “first-mover credits”.
First-mover credits correspond with shares in a 2% pool of company-wide generated ROI revenue.
Brewster claims first-mover credits are worth more than Bitqyck mining positions.
[31:38] I would suggest to you that just that 2% first-mover credit would be worth more to you than even having a mining rig, month after month.
When I talked to Bruce and Sam (Mendez) and I see what’s going on and how big this is getting, I feel like a 2% first-mover … is actually more valuable than actually owning a rig.
It’s a very, very substantial long-term residual payment.
Brewster stresses repeatedly that none of this costs US Bitqyck affiliates anything, which is fine as far as participating in an unregistered securities offering goes.
He does however fail to address the illegality of US residents promoting an unregistered security (and in this case, profiting off of it).
Regardless of whether a US Bitqyck affiliate directly invests in a mining investment position, profiting off of unregistered securities by any means may still trigger clawbacks in the result of regulatory intervention.
At the end of the day if Bitqyck were looking to legitimately generate ROI revenue through bitcoin mining, there’s nothing stopping them from registering with the SEC and making the appropriate disclosures to their investors.
This would permit Bitqyck to offer bitcoin mining positions to anyone, anywhere in the world.
Instead Bitqyck are going to set up a shell company in Asia, for the sole purpose of hoping to circumvent US securities law.
Needless to say this probably isn’t going to end well.
How much does it cost to register with the SEC?
For Bitqyck, probably less than the cost of one mining position.
sec.gov/ofm/Article/feeamt.html
Is it a lengthy, tortuous process that takes many months or years to accomplish?
Nah, fill in some forms and off you go.
There’s no excuse and what’s more, if you wish to offer securities to US residents and/or promote securities, registering with the SEC is a legal requirement.
but … but … but… you’d probably have to divulge your past business affiliations and rap sheet!!!