Nui Restructures, Pseudo-Compliance and Responding to Cease & Desist
A Texas cease and desist order forced Nui to announce a restructuring of its affiliate program—but the company's response amounts to little more than financial theater designed to dodge securities law.
CEO Darren Olayan has gone silent since he claimed weeks ago that securities regulation doesn't exist. That left "Keystone Leaders" Jim Paré and Casey Combden to explain the situation to affiliates on a recent webinar.
Combden opened by addressing the Texas order head-on. Nui corporate "knew this was going to happen," he told the room, signaling to anxious affiliates that there's nothing to worry about. That raises an obvious question: if Nui knew unregistered securities were illegal, why didn't they stop selling them?
BehindMLM flagged Nui's unregistered securities problem back in November 2017. The company had years to get compliant.
Combden is no stranger to securities trouble himself. He received his own cease and desist from the Ontario Securities Commission in February for promoting the USI-Tech Ponzi scheme.
On the call, a Jones Day attorney named Mark Rasmussen appeared on screen while Paré and Combden discussed the Texas order, suggesting he's now handling Nui's legal response. Nui also unveiled a new compensation plan and affiliate signup structure.
The company introduced three new membership tiers: Pro at $1,150, Elite at $2,650, and Executive at $6,700. Each tier bundles in an Ant Router, a piece of mining hardware that Nui affiliates receive after paying a $500 Mintage Mining fee.
Paré explained the rush: "The number one thing for us is being compliant throughout the entire United States. What happened in the last couple of days is we took what we were projecting to do in six months and jammed it into this week."
Here's the sleight of hand. The Ant Router—a model R1-LTC available from Bitmain for $30—generates minimal cryptocurrency. It produces 1.29 MH/s for Litecoin mining or other Scrypt-based coins. Paré claims bundling this hardware makes affiliates "active" in mining instead of passive investors. "Moving people into a piece of hardware means they're actually active in this," he said. "This is us moving into the highest level of compliance."
It's nonsense. The Ant Router generates nothing meaningful. More importantly, Nui affiliates still receive three-year passive returns on their Mintage Mining investment regardless of what they do with the router. That passive income stream is precisely what Texas regulators targeted in their cease and desist.
The distinction matters in securities law. Anything an affiliate generates with their router is fine. But the underlying Mintage Mining contract—the promise of passive ROI—remains a security. No amount of hardware bundling changes that fundamental fact.
Nui can dress up its offering however it wants. The core product hasn't changed. Affiliates pay money upfront and receive passive returns later. That's an investment contract. You can't make an unregistered security compliant by attaching a cheap mining rig to it.
🤖 Quick Answer
What restructuring did Nui announce following the Texas cease and desist order?Nui announced a restructuring of its affiliate program in response to regulatory pressure from Texas authorities regarding unregistered securities sales. The company's response involved organizational changes presented as compliance measures, though critics characterized these adjustments as minimal and primarily designed to circumvent securities regulations rather than achieve genuine compliance.
Who communicated Nui's response to the cease and desist order?
Following CEO Darren Olayan's public silence, "Keystone Leaders" Jim Paré and Casey Combden addressed the situation during a webinar directed at company affiliates. Combden specifically addressed the Texas order, indicating that Nui corporate had anticipated regulatory action and suggesting affiliates should remain untroubled by the enforcement action.
What regulatory violation prompted the cease and desist action against Nui?
Texas authorities issued a cease and des
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