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 acquainted with 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 alternate these cash for a big revenue.
Because it turned out, Respondents overpromised and by no means delivered, and traders have but to obtain a return on their funding.
Kannabiz Koin’s and My BlockX’s enterprise fashions have been comparatively the identical.
Kannabiz Koin associates invested $7000 in KK Miners, on the promise of passive returns paid out over 1000 days. Returns have been paid out on Ok Koins, a cryptocurrency token Sowerby created.
Sowerby advised traders that Ok Koinz are a tradable cryptocurrency, backed by a longtime hashish firm in Oklahoma.
Kannabiz Koin’s Ok Koin returns have been presupposed 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 Ok Koinz on his My BlockX alternate.
This was executed so Sowerby might drain “the equal of $600,000 in cryptocurrency … from the Ok Koinz mission liquidity pool”.
After the failed December launch, Respondents reassured traders that Ok Koinz would launch on April 20, 2022.
Moreover, Respondents knowledgeable traders that Ok Koinz had secured celeb endorsements from Snoop Dogg and Justin Bieber.
Ok Koinz did not launch on April 20, 2022.
Regardless of the second failure to launch, Respondents reassured traders that the Ok 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 traders.
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 traders to immediately buy extra Ok Koinz in anticipation of a skyrocketing worth improve after the June 2022, launch.
This time Ok Koinz did launch on My BlockX. By this stage after all Sowerby had no intention of honoring any money out requests.
The worth of Ok Koinz was considerably decrease than the previously-guaranteed $0.018.
Consequently, traders have been unable to promote any of the Ok Koinz mined for them through 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 traders.
Throughout this assembly, Sowerby advised traders that Ok Koinz would really be used as loyalty- or reward-type tokens, for use completely on merchandise on the OK Hashish Firm.
Sowerby went on to inform traders that the OK Hashish Firm, not Respondents, was liable for the liquidity of Ok Koinz, and We Promote Miners’s sole goal 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 advised traders the endorsements from Snoop Dogg and Justin Bieber had fallen via.
Upon info and perception such endorsements, together with the negotiation of such endorsements, by no means existed.
Sowerby deflected refund requests from Kannabiz Koin traders onto We Promote Miners LLC’s COO. These traders have been advised their refunds could be processed, however they wouldn’t be capable of money out for a 12 months.
Different Kannabiz Koin traders have been advised in the event that they wished a refund, they needed to swap over to My BlockX.
Upon info and perception, no investor has obtained a return on their funding in KK Miners via the sale of Ok Koinz, nor has any investor obtained 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 Ok Koinz, traders might spend money on a BLKX Miner for $6,000 and in return they’d mine 100,000 BLKX per 30 days.
Equally to Ok Koinz, Respondents advised traders that the miners have been bodily situated and hosted at his mining facility in Tempe.
Upon info and perception, no investor ever obtained a bodily mining machine from Respondents.
My BlockX returns have 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 traders to purchase and maintain BLKX tokens.
Sowerby, throughout Zoom investor conferences, inspired traders to purchase extra tokens and stake them, claiming that when all of the tokens have been staked, the value would skyrocket, and everybody would make some huge cash.
Right here’s how My BlockX finally panned out;
Upon info and perception, BLKX just isn’t accepted forex anyplace outdoors of the MyBlockX alternate, which is owned by Respondent Sowerby.
On the time of submitting, BLKX has no financial worth.
Upon info and perception, no investor has obtained a return on their funding in BLKX Miners via the sale of BLKX, nor has any investor obtained 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 1 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 provided or bought securities of any type.
Quite, they promote {hardware} for mining cryptocurrency and supply internet hosting providers to their clients 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 court docket.
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 observe is Arizona resident Douglas Carpa additionally being served.
Carpa seems to signify 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 through the use of armed militia members to “arrest” the choose, the prosecutor and the U.S. legal professional.
The resisters … offered the activists with an inventory 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 data present Carpa was launched in 2005.
I can’t 100% verify 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 house owners have 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.
Just a few months after launch, Sowerby put BitClub Community scammer Joe Abel in cost and rebranded as Dunamis International Tech.
Dunamis International Tech collapsed by the top of 2019. Sowerby bought the affiliate investor base off to Travis Bott’s Onyx Way of life Ponzi.
After Dunamis International Tech got here Kannabiz Koin and My Blockchain Life, the latter of which might finally change into 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 anticipated to be on or round June fifteenth.
