Tech 30 July 2018Gerald Fenech
Regulator clears Genesis Mining of crime—a first for South Carolina
Icelandic cryptocurrency mining company Genesis Mining is all set to resume its operations in the United States after the Securities Commissioner of South Carolina dismissed its six-month-old cease and desist order against the operator. The ruling was considered a first for the U.S. state, and also a turning point for other companies looking to fight back against regulators.
The cease and desist order was handed down last March 9, according to Shah Hafizi, chief compliance officer for Genesis Mining. Hafizi told news.bitcoin.com the company has “worked closely with South Carolina officials to educate them and provide a practitioner’s perspective on mining, blockchain networks and the decentralized nature of the technologies we support.”
Last Thursday, Deputy Securities Commissioner of the State of South Carolina Tracy Meyers signed the order allowing that Genesis Mining to be “dismissed as a respondent from the administrative order to cease and desist.”
Authorities also linked Genesis Mining to another case, which accused it of selling unregistered securities via cloud mining contracts. This was also dismissed, although the mining company’s broker at the time, Swiss Gold, is still under a cease and desist order in relation to this case.
Hafizi noted that working with regulators ensured that Genesis Mining’s investors “are protected, and innovation is not stifled.”
Regulation is a touchy subject especially when it comes to business activity in any state, particularly with blockchain and cryptocurrency. Jumping to conclusions is an obvious result by regulators especially when you consider that this is a cloud mining company operating in a nascent industry. In South Carolina, residents bought hard drive power over blocks of time, which appeared to regulators as a form of a security. This resulted in the cease order for Genesis Mining and Swiss Gold.
“We believe for the industry to reach its true potential, companies and regulators need to collaborate. We strongly encourage blockchain companies, regardless of where they are in the world, to proactively engage with local regulators at all levels,” Hafizi said.
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