The US government sued "cloud mining" Ultra Mining: Chinese mining farms purchased Antminer S17+

The Texas Securities Commission and the Alabama Securities Commission, two U.S. government agencies, filed a lawsuit against the cloud mining agency Ultra BTC Mining and its agent Laura Branch on Wednesday, alleging that the computing power of mining machines sold by the cloud mining agency is "securities" and is not registered, and that there is fraud in its promotion.

According to a U.S. press release, the cloud computing/cloud mining company promised that an investment of $10,000 would earn an annual return of $10,500, and an investment of $50,000 would earn a return of $52,000. The cloud computing company said that the price of Bitcoin would reach $23,000 in the future, which would allow investors to get greater returns.

Wu said that the blockchain saw in the press release provided by Ultra Mining that Ultra Mining claims that they provide legal Bitcoin mining services and can perform remote mining by using powerful data centers, which are located in the United States and China, with a computing power of about 671PH/s. In addition, Ultra Mining claims that they use the most advanced S17+ Antminer developed by Bitmain.

Cloud computing power is between cryptocurrency investment and traditional mining industry. It is also a rapidly developing form of investment, but its supervision is in a gray area. For cloud computing power, US financial institutions have always regulated it. In March 2018, Genesis Mining, the world's largest cloud computing company, was issued a stop-work order by the Securities Department of the South Carolina Attorney General's Office because it was not registered as a securities dealer. But the ban was lifted five months later.

In China, since 2019, cloud computing has become a popular way of playing in the currency and mining circles. There are more than a dozen mainstream cloud computing companies, and there are countless non-mainstream ones. In the final analysis, cloud computing is a form of leasing + hosting of mining machines, connecting traditional mine owners with people who want to invest through mining. It reduces the risk of bear market for mine owners and lowers the threshold for mining for investors, so it quickly became popular. At present, the more mainstream cloud computing platforms in China include BitDeer, Huobi Mining Pool, OXBTC, Suanyi Investment, RHY, etc. The difference between cloud computing and mining can be shown in a picture, but of course it is not that simple.

The US government's lawsuit is also a reminder to Chinese cloud mining companies and players. Cloud mining is between cryptocurrency investment and mining, and has certain financial attributes. There is also a lot of exaggerated publicity on the Chinese platform. However, China lacks compliance supervision for the cryptocurrency and mining industries as a whole, let alone cloud mining. Users can only rely on themselves.

Wu said that although some cloud computing platforms have lower prices and higher returns, it is necessary to consider choosing cloud computing platforms backed by large mining machines, mining farms, and mining pools, so that at least there is a backstage to look for if they run away. In the early years, most of the cloud computing service platforms of Kaomao, such as AMHash, Star Cube, Bit Power, and Calculation Tower, were shut down and ran away, and investors lost all their money. To judge whether a cloud computing platform is reliable or not, it is also necessary to see if there is an actual mining farm behind it. If there is no actual mining farm, it is very likely to be a capital pool, with the risk of running away and funding interruption. In fact, data shows that 90% of cloud mining is of this type.