The Attorney General of South Carolina served a cease and desist order on Genesis Mining, which is one of the major operators of cloud mining. Cloud mining enables users to mine cryptocurrencies without managing the hardware because the mining rigs are housed and maintained by the cloud mining company. The user registers with the company and purchases mining contracts or shares
While Genesis’ last known address is Chinachem Century Tower in Hong Kong, the SC Attorney General posits that “Genesis Mining continuously offered investment opportunities in Mining Contracts to South Carolina residents through its website”. For this reason, the administrative proceeding document is rightly directed to the Securities Commissioner of South Carolina. Also, the contracts are offered through Swiss Gold Global, which is not registered as a broker in South Carolina. In the view of the SC Attorney General “investment contracts constitute securities, and an investment contract includes an investment in a common enterprise with the expectation of profits”.
If other jurisdictions takes the same position, cloud mining companies will have to register to operate in the US.
More information here