South Carolina bans two cryptocurrency mining companies

The injunction, issued on March 9 against Genesis Mining and Swiss Gold Global Inc, orders them to cease all operations in the state.

This stems from the fact that South Carolina considers mining contracts to be securities, so it is illegal to sell them to local residents without proper regulation. At the same time, the South Carolina Stock Commission ruled that Swiss Gold Global was unregistered as a broker to sell mining agreements to Genesis.

Genesis Mining currently provides cloud mining services for six cryptocurrencies, including Bitcoin, Dash and Ethereum. Through mining contracts, customers rent a certain amount of computing power on the cloud platform for a certain period of time.

But South Carolina regulators believe that the agreements between Genesis and its customers "constitute investment contracts and should therefore be considered securities." They also banned the two companies from doing business in the state in the future. The two companies can now appeal.

A few days ago, regulators in New Jersey, USA, also issued a ban on a blockchain company, ruling that the company sold unregistered securities to local residents.