Mintage Mining claim to be “pre-compliant” with SEC regulation
Mintage Mining is purportedly a partnership between David Childs (cited as owner of the company) and Darren Olayan, CEO of Nui.
BehindMLM reviewed Mintage Mining last December. We came to the conclusion that, at best the cloud mining business model would constitute a securities offering.
The lack of registration with the SEC at the time meant that, at worst, Mintage Mining could be recycling newly invested funds to pay off existing investors.
Likely due to the increasing number of issued cryptocurrency securities fraud cease and desists, Darren Olayan has attempted to brush off regulatory compliance by claiming Mintage Mining is “pre-compliant” with the SEC.
Olayan made claim sitting alongside David Childs, in a March 4th YouTube video titled “Who and What is Mintage Mining”.
After acknowledging “fraud and all kinds of crazy stuff” occurring in the MLM cryptocurrency niche, Olayan goes on to claim “there is no regulation”.
[3:27] But the beautiful part to that is we have known this and we have focused on the fact that legitimate equipment, mining and all that provided – um, we can provide a real service.
The one thing we have focused on, harder than I’ve ever done in my entire life is, the legal side.
We’ve been working with a law firm called Jones Day.
[3:50] The reason why we went with them is because of some of their partners, that have been leading legislation in cryptocurrencies.
[4:18] Fortunately because of our relationships, you guys can take the time and Google, and you’ll notice but some of these largest government agencies, we’re talking SEC, we’re talking treasury, we’re talking FTC, we’re talking about FinCEN… we’re talking about all the ones we’ve been waiting for.
We’ve been dying for them to step in the game and help clean it up.
Well the beautiful thing is we’ve spent the time and done the due-diligence and the money, and done everything they’ve asked us to do, so that we are compliant when compliance comes.
[So you’re pre-compliant?]
[4:58] Because of the law firms we’re working with, we want regulation, we want to be cleaned up and what we can tell you is we’ve done the due-diligence, spent the time and have the right partnerships to be ready for when compliance comes.
At this point you’re probably thinking, “Oh good, Mintage Mining intend to register their cloud mining opportunity with the SEC and file legally required disclosures”.
Yeah, that’s not what “compliance” means to Darren Olayan.
After just speaking as to how “ready” Mintage Mining is to be compliant when compliance comes (side-note: securities regulation in the US has existed since 1933), Olayan goes on to detail plans to circumvent US securities regulation.
[5:42] We’ve set up the structure properly so that if anything were to go sideways, anything, money’s received for contracts through crypto. Money’s paid out through crypto.
That means if everything that we did to prevent and be compliant when compliance comes, if that all went sideways, we still have the ability to pay them (investors) on their contracts (laughter).
What Olayan is skirting around is Mintage Mining and Nui being issued a securities fraud cease and desist.
While I can’t speak to the legal advice Jones Day may or may not have provided Mintage Mining on this subject, what I can provide you are hard facts.
Currently neither Mintage Mining, Nui, Darren Olayan or David Childs are registered with the SEC.
That means any securities offering made by Mintage Mining, Nui, Olayan or Childs is illegal.
As at the time of publication Alexa estimate the US is by far the largest source of traffic to the Mintage Mining website (58%).
So it follows the US is also probably the largest source of investment.
As per the Mintage Mining compensation plan we reviewed last December, affiliates invest $25 or more on the expectation of a ROI.
This is most definitely a securities offering.
When asked, here’s David Childs’ attempt to get around the obvious;
[6:14] As a mining group, there is a lot of … confusion on what’s actually legal and what’s not.
Cuz the truth is if it’s perceived as a return on investment, then that’s where it’s perceived as illegal in the US… it’s a security.
The mining we’re offering is not a return on investment, it’s the proceeds of the hardware itself.
It’s essentially a lease of hardware.
Yeah, here’s the thing though – securities regulators in the US don’t care how you dress up a security.
If you’re soliciting investment and paying out a passive return to your investors (no effort on their part), that’s a security.
The cleanest example of this is the March 9th securities fraud cease and desist South Carolina issued Genesis Mining.
Like Mintage Mining, Genesis Mining paid investors a ROI purportedly generated via cloud mining.
The Mining Contracts offered and sold by Genesis Mining constitute investment contracts and are thus securities as defined by the Act.
Rather than challenge the notice and argue they weren’t selling a security, Genesis Mining ceased doing business in South Carolina.
South Carolina securities law however isn’t materially different from federal securities law, meaning at any moment the SEC could file a federal complaint and shut Genesis Mining down nation-wide.
Mintage Mining are rolling the same dice, with an added layer of fraud by way of publicly asserting they’re not engaged in securities fraud.
What’s more, Mintage Mining affiliates appear to have taken what the company has told them and dangerously embellished on the details.
Here’s how one Mintage Mining sales pitch I’ve personally cited describes the company’s relationship with the Jones Day law firm;
Mintage Mining … is a mining group out of the West Indies created by David Child [sic].
Darren Olayan (CEO of Nui), and David Childs have had a long business and friendship relationship.
They entered into an agreement where Nui would market for Mintage as long as they could send members their way and create a network of people across the globe.
The companies are represented by Jones Day Law Firm who so happens to be the same firm tat [sic] represents the SEC in Crypto related cases.
Anyone with half a brain knows the SEC has its own attorneys and represents itself, yet this is what Mintage Mining affiliates are running around claiming.
The same marketing pitch also goes on to claim prospective investors can fund their Mintage Mining investment through finance.
This company is so outstanding and the mining has been so incredibly so consistent, that there is even now a finance company who will finance NUi/Mintage Mining Members.
The company linked in the pitch is Mining Credit, who on their website claim to have ‘secured over $250 million in unsecured funding‘.
Get Capital for Cloud Mining Cryptocurrency.
We Help You Get Unsecured Credit Lines at 0% Interest For 9 to 15 Months.
The minimum loan amount available on the Mining Credit website is $25,000.
Using a $25,000 or more unsecured loan to participate in an unregistered securities offering?
Undoubtedly a new low for the MLM cryptocurrency niche.
Update 12th July 2018 – On July 11th the Texas Securities Board issued Nui and Mintage Mining with a securities fraud cease and desist.