A Nevada-based company is stepping up its threat to shutter its bitcoin mining software business after regulators issued a warning.
SilverMine, a startup founded by former Microsoft engineer Dan Pappas, announced Tuesday that it would cease operations by the end of the week after regulators said it violated the federal Computer Fraud and Abuse Act.
SilverHash, another company owned by Pappamas, said it would also shut down, too.
Silvermine, SilverHash and SilverHash are all named in a lawsuit filed by federal prosecutors against SilverHash, SilverMine and SilverMine.
In the lawsuit, prosecutors alleged that SilverHash had operated as a “miner pool” that allowed users to mine bitcoins.
Silver’s mining software has been the target of several regulatory probes in the U.S., including a probe by the Securities and Exchange Commission and the U,S.
attorney’s office for the Northern District of California.
The SEC and the Northern California office said they had identified more than 400 “high-risk” Bitcoin-related transactions over a period of four months, including $20 million in Bitcoin in a single day in March.
The SEC also said that SilverMine had allegedly been sending millions of dollars in money to a man identified in the suit as the “Bitcoin address” of a man named Paul Smith, a former member of the Bitcoin Foundation.
Silver said in a statement that the company was “committed to complying with all applicable laws and regulations.”