The Arizona Company Fee is trying to file a securities fraud stop and desist towards We Promote Miners LLC and proprietor Jeremie Sowerby.
The ACC’s Securities Division claims We Promote Miners LLC and Sowerby have violated Arizona’s Securities Act.
As alleged by the ACC’s Securities Division, We Promote Miners LLC and Sowerby (proper)
marketed investments in two new cryptocurrency miners, and their respective cryptocurrency tokens, Kannabiz Koin and BlockX.
Whereas I’m not accustomed to Kannabiz Koin, BlockX is a part of Sowerby’s My Blockchain Life and My BlockX Ponzi schemes.
The gross sales pitch was easy, spend money on their cryptocurrency mining machines, obtain new cash as rewards, and change these cash for a big revenue.
Because it turned out, Respondents overpromised and by no means delivered, and buyers have but to obtain a return on their funding.
Kannabiz Koin’s and My BlockX’s enterprise fashions had been comparatively the identical.
Kannabiz Koin associates invested $7000 in KK Miners, on the promise of passive returns paid out over 1000 days. Returns had been paid out on Okay Koins, a cryptocurrency token Sowerby created.
Sowerby informed buyers that Okay Koinz are a tradable cryptocurrency, backed by a longtime hashish firm in Oklahoma.
Kannabiz Koin’s Okay Koin returns had been purported to pay out a “assured no-risk” $7000 a month per funding.
Kannabiz Koins pre-launched in November 2021. On December twenty fourth, 2021, Sowerby listed Okay Koinz on his My BlockX change.
This was finished so Sowerby might drain “the equal of $600,000 in cryptocurrency … from the Okay Koinz mission liquidity pool”.
After the failed December launch, Respondents reassured buyers that Okay Koinz would launch on April 20, 2022.
Moreover, Respondents knowledgeable buyers that Okay Koinz had secured superstar endorsements from Snoop Dogg and Justin Bieber.
Okay Koinz did not launch on April 20, 2022.
Regardless of the second failure to launch, Respondents reassured buyers that the Okay Koinz launch was imminent, this time on June 1, 2022.
Previous to the supposed June 1st launch, Sowerby hosted a Zoom video assembly for KK Miner buyers.
Sowerby used the Zoom to pitch his Kannabiz Koin bagholders on My BlockX.
Sowerby spoke at size about his different cryptocurrency mining enterprise … and the way the BlockX token (“BLKX”) worth would
quickly attain upwards of $10 per BLKX token.Sowerby went on to encourage KK Miner buyers to straight buy further Okay Koinz in anticipation of a skyrocketing worth improve after the June 2022, launch.
This time Okay Koinz did launch on My BlockX. By this stage after all Sowerby had no intention of honoring any money out requests.
The worth of Okay Koinz was considerably decrease than the previously-guaranteed $0.018.
Consequently, buyers had been unable to promote any of the Okay Koinz mined for them by way of the KK Miners.
What adopted was an try to dump Kannabiz Koin’s ROI liabilities onto the aforementioned “established hashish firm in Oklahoma”.
On June 15, 2022, Sowerby hosted one other Zoom video assembly for KK Miner buyers.
Throughout this assembly, Sowerby informed buyers that Okay Koinz would really be used as loyalty- or reward-type tokens, for use solely on merchandise on the OK Hashish Firm.
Sowerby went on to inform buyers that the OK Hashish Firm, not Respondents, was answerable for the liquidity of Okay Koinz, and We Promote Miners’s sole function was to host the KK Miners.
The ACC’s Securities Division believes this was an exit-scam deliberate from the start.
After the June fifteenth Zoom webinar, issues continued to deteriorate.
Throughout the July twenty eighth Zoom assembly, a consultant of We Promote Miners, LLC informed buyers the endorsements from Snoop Dogg and Justin Bieber had fallen by means of.
Upon data and perception such endorsements, together with the negotiation of such endorsements, by no means existed.
Sowerby deflected refund requests from Kannabiz Koin buyers onto We Promote Miners LLC’s COO. These buyers had been informed their refunds can be processed, however they wouldn’t have the ability to money out for a yr.
Different Kannabiz Koin buyers had been informed in the event that they wished a refund, they needed to change over to My BlockX.
Upon data and perception, no investor has acquired a return on their funding in KK Miners by means of the sale of Okay Koinz, nor has any investor acquired a refund for his or her funding in KK Miners.
My BlockX launched in November 2021 and had associates spend money on BLKX Miners. This went on till mid 2022, after which My BlockX pivoted to “staking” and a buying and selling bot Ponzi fashions.
Like Okay Koinz, buyers might spend money on a BLKX Miner for $6,000 and in return they might mine 100,000 BLKX per thirty days.
Equally to Okay Koinz, Respondents informed buyers that the miners had been bodily situated and hosted at his mining facility in Tempe.
Upon data and perception, no investor ever acquired a bodily mining machine from Respondents.
My BlockX returns had been paid in BLKX, one other cryptocurrency token Sowerby created.
Sowerby represented that BLKX was already buying and selling on the MyBlockX web site, at a beginning worth of $0.004 per token and that the worth of the token would rapidly rise as excessive as $10 per token.
Sowerby based mostly the $10/token illustration on the introduction of a brand new staking mannequin that required buyers to purchase and maintain BLKX tokens.
Sowerby, throughout Zoom investor conferences, inspired buyers to purchase extra tokens and stake them, claiming that when all of the tokens had been staked, the worth would skyrocket, and everybody would make some huge cash.
Right here’s how My BlockX in the end panned out;
Upon data and perception, BLKX shouldn’t be accepted foreign money wherever outdoors of the MyBlockX change, which is owned by Respondent Sowerby.
On the time of submitting, BLKX has no financial worth.
Upon data and perception, no investor has acquired a return on their funding in BLKX Miners by means of the sale of BLKX, nor has any investor acquired a refund for his or her funding in BLKX Miners.
The ACC’s Securities Division claims to have tracked “over $57 million in cryptocurrency” to at least one pockets owned by Sowerby.
Complete Kannabiz Koin and My BlockX investor losses are unknown.
In submitting their discover, the ACC’s Securities Division seeks a stop and desist be entered towards We Promote Miners and Sowerby, restitution and civil financial penalties.
The ACC’s Securities Division’s unique discover was filed on December 2nd, 2022.
We Promote Miners LLC and Sowerby filed a discover requesting a listening to and jury trial on the matter on December twenty eighth, 2022.
On February twenty fourth We Promote Miners LLC and Sowerby filed a Movement to Dismiss the case.
The premise of this movement is straightforward: Respondents don’t and haven’t supplied or offered securities of any form.
Quite, they promote {hardware} for mining cryptocurrency and supply internet hosting companies to their prospects at a colocation facility in Tempe, Arizona.
The ACC’s Securities Division filed its response to Sowerby’s Movement to Dismiss on March twenty fourth.
Having documented Sowerby’s My BlockX securities fraud, I don’t see Sowerby’s “our securities providing isn’t a securities providing” argument holding up in courtroom.
A listening to on the Movement to Dismiss has been scheduled for June fifteenth, 2023.
Though solely We Promote Miners LLC and Jeremie Sowerby are the one named respondents within the ACC’s Securities Division’s discover, of notice is Arizona resident Douglas Carpa additionally being served.
Carpa seems to symbolize We Promote Miners LLC (presumably because the unnamed COO), which might make him an confederate to Sowerby’s alleged securities fraud.
Again in 1996 Carpa, then aged 50, now 78, was sentenced to 4 years in jail for tax evasion.
In 1998 Carpa was sentenced to an extra ten years for conspiracy and obstruction of justice.
Two tax resisters plotted to disrupt their federal tax evasion trial in San Francisco by utilizing armed militia members to “arrest” the choose, the prosecutor and the U.S. lawyer.
The resisters … supplied the activists with a listing of the names and badge numbers of the jurors chosen for his or her federal tax fraud trial, the indictment says.
Philip Marsh and Douglas Carpa now face prosecution for conspiracy and obstruction of justice stemming from their alleged involvement within the effort to disrupt their tax evasion trial.
Bureau of Prisons information present Carpa was launched in 2005.
I can’t 100% affirm his involvement however I imagine Sowerby’s cryptocurrency fraud dates again to BitClub Community.
BitClub Community was a crypto mining MLM firm launched in 2014.
The rip-off’s homeowners had been arrested in 2019, with the DOJ confirming BitClub Community was a $722 million greenback Ponzi scheme.
BehindMLM has been monitoring Sowerby’s confirmed securities fraud since 2019, starting with Dunamis Community.
Dunamis Mining was an MLM crypto “mining” themed Ponzi launched in early 2019.
A number of months after launch, Sowerby put BitClub Community scammer Joe Abel in cost and rebranded as Dunamis World Tech.
Dunamis World Tech collapsed by the tip of 2019. Sowerby offered the affiliate investor base off to Travis Bott’s Onyx Way of life Ponzi.
After Dunamis World Tech got here Kannabiz Koin and My Blockchain Life, the latter of which might ultimately grow to be My BlockX.
Whether or not there’s a federal investigation into Sowerby’s cryptocurrency Ponzi schemes is unclear.
Following the Movement to Dismiss listening to, our subsequent replace on the ACC Securities’ Division’s case is predicted to be on or round June fifteenth.