Missouri Secretary of State shuts down Virtual Mining Corporation over deceptive tactics

bitcoin mining

Fast-Hash One Platinum Edition Bitcoin Mining Machine

Springfield, Missouri,-based bitcoin mining hardware manufacturer Virtual Mining Corporation (VMC) was ordered to halt operations yesterday by Missouri Secretary of State Jason Kander.

According to Kander, VMC CEO Kenneth Slaughter “used deceptive tactics” to fund the development of their mining hardware, promising returns as high as “2,812 percent” on the investment and failing to warn investors of the associated risks.

According to the press release from Kander’s office:

Instead, Slaughter allegedly said that Bitcoin was “highly regulated” at both the state and federal level. In reality, as an investor alert from Kander’s office noted, Bitcoins are not issued by banks or the government, and various federal regulators are still assessing how to approach the digital currency.             

                                                                                           

The release also notes that Slaughter’s company failed to advise investors of relevant complaints against his previous company, Active Internet Communications. The report says that Slaughter’s company raised more than $200,000 worth of bitcoins from investors.

VMC claims to be working on a new generation of 28nm ASIC mining chips for their Fast-Hash One Platinum Edition miner. The company said the full version of the rig would provide up to 24.5 TH/s via 96 ASIC cards.

It is not currently known what the next steps are for VMC, although the company currently faces fines and additional legal action from Kander’s office.

Written on 03 Jun 2014.