Information and Alerts

Government Actions

State of California Department of Financial Protection & Innovation: Desist and Refrain Order: BitHarvest Ltd; www.bitharvest.io; Lee, Logan; Herlin, Lenni; Cerato, Jan Gregory

On August 20, 2024 the State of California Business, Consumer Services and Housing Agency, Department of Financial Protection and Services issued a Desist and Refrain Order against BitHarvest Ltd.

BitHarvest Ltd (BitHarvest) is and was a business incorporated in Colorado on April 23, 2024, with a purported place of business in Kuala Lumpur, Malaysia. BitHarvest operated the website https://www.bitharvest.io/, as well as social media accounts on Telegram (https://t.me/bitharvest_EN), X (formerly known as Twitter) (https://x.com/bitharvest_io), Facebook (https://www.facebook.com/Bitharvestio/), and Instagram (https://www.instagram.com/bitharvest_io/).

Logan Lee (Lee) held himself out as the co-founder and CEO of BitHarvest. Lee controlled and induced or knowingly provided substantial assistance to BitHarvest. Lenni Herlin (Herlin) held himself out as the co-founder and CTO of BitHarvest. Herlin controlled and induced or knowingly provided substantial assistance to BitHarvest. Jan Gregory Cerato (Cerato) is and was a BitHarvest promoter. Cerato is a serial promoter of scams and was the subject of multiple enforcement actions issued by the Commissioner and other regulators: Cerato was the subject of three separate desist and refrain orders issued by the Commissioner in August 2023 for violations of the qualification and antifraud provisions of the CSL. These actions arose from Cerato’s involvement in three different crypto asset scams called CloudFi, CoinMarketBull, and Vortic United. Cerato was also sanctioned by the Alberta Securities Commission in September 2022 for illegally distributing securities. At all relevant times, Cerato operated a YouTube channel called “Jan Gregory” (https://www.youtube.com/@jangregory). Cerato controlled and induced or knowingly provided substantial assistance to BitHarvest.

Beginning at least as early as May 2024, BitHarvest offered and sold securities in the form of investment contracts in California through general solicitations on its website. BitHarvest referred to these investment contracts as “BitBoosters.”

BitHarvest held itself out as a bitcoin mining platform. Investors could register for an account on the BitHarvest website, deposit funds, and purchase BitBoosters from BitHarvest. The company marketed BitBoosters as BitHarvest’s proprietary USB bitcoin mining devices. After investors purchased individual BitBooster devices, BitHarvest claimed that it would connect each device to its onsite mining farm in its Kuala Lumpur headquarters where the company would operate the BitBoosters on behalf of investors. The devices supposedly mined bitcoin around the clock and generated passive investment returns for investors. BitHarvest represented that it would credit investors’ returns to their BitHarvest accounts, which could be withdrawn from the BitHarvest website.

BitHarvest claimed that it used artificial intelligence (AI) and machine learning to mine bitcoin faster and more efficiently than traditional bitcoin mining.

After investors created their accounts on the BitHarvest website, investors could log into their account using their username and password to monitor their purported balance and returns, deposit funds, and request withdrawals.

BitHarvest facilitated investor deposits and withdrawals using crypto assets.

As part of its solicitation efforts, BitHarvest used a multilevel marketing (MLM) structure that would reward investors for inducing others to send money to BitHarvest. According to this program, investors would be paid a referral bonus based on the amount of funds deposited by the investors that they recruited. Investors would also be paid additional referral bonuses when the investors that they recruited, in turn, recruited new investors.

Investors seeking to take advantage of BitHarvest’s referral program created and posted videos to YouTube and posted content on other social media websites to recruit others to invest in BitHarvest. In their roles as BitHarvest executives, Lee and Herlin helped BitHarvest solicit investors by appearing in promotional videos in which they explained BitHarvest’s purported business and described how investors could make money with BitHarvest. Promotional videos featuring Lee and Herlin were shared by BitHarvest and by BitHarvest promoters.

Cerato helped BitHarvest solicit investors by conducting live Zoom meetings with investors and prospective investors to promote BitHarvest’s securities. Cerato also used his YouTube channel to promote BitHarvest to his audience of over 2,220 subscribers. Beginning as early as May 2024, Cerato created and published at least 33 videos promoting BitHarvest, in which he presented slide decks, explained BitHarvest’s purported business, described how investors could make money with BitHarvest, conducted interviews with BitHarvest executives, gave tours of BitHarvest’s purported server farm in Kuala Lumpur, and encouraged investors to recruit other investors. All of the videos contained Cerato’s unique referral link so that prospective investors would click on the link to create a BitHarvest account and invest. Cerato would receive compensation for these transactions.

Cerato made various representations to prospective investors, including that BitHarvest was “the best opportunity of [their] lives,” that BitHarvest was “here for the long game,” that “everybody’s gonna win,” and that the “money won’t stop for another 120 years.”

The BitBoosters offered by BitHarvest were securities that were neither qualified nor exempt from the qualification requirement under the CSL. The Department has not issued a permit or other form of qualification authorizing BitHarvest to sell these securities in California. 

Based on the foregoing findings, the Commissioner is of the opinion that the securities offered or sold by BitHarvest Ltd were subject to qualification under the CSL and have been or are being offered or sold without first being qualified in violation of Corporations Code section 25110. Moreover, the Commissioner is of the opinion that Logan Lee, Lenni Herlin, and Jan Gregory Cerato have violated Corporations Code section 25110 by knowingly, directly, or indirectly controlling or inducing or providing substantial assistance to BitHarvest Ltd to violate Corporations Code section 25110 within the meaning of Corporations Code section 25403, subdivisions (a) and (b). 

Pursuant to Corporations Code section 25532, BitHarvest Ltd, Logan Lee, Lenni Herlin, and Jan Gregory Cerato are hereby ordered to desist and refrain from the further offer or sale of securities in California, including but not limited to investment contracts known as BitBoosters, unless and until the qualification requirements of the CSL have been met. 

Any person who with knowledge directly or indirectly controls and induces another person to violate any provision of the CSL, or knowingly provides substantial assistance to another person to violate any provision of the CSL, is deemed to be in violation of that provision to the same extent as the other person. Cal. Corp. Code § 25403(a) and (b).

For more information, please contact the State of California Business, Consumer Services and Housing Agency, Department of Financial Protection and Services at https://dfpi.ca.gov/ or (866) 275-2677.

Licensing

BBB confirmed that BitHarvest Ltd had not obtained a necessary license from Denver: Division of Banking. BBB encourages you to contact the following agency or agencies to confirm this information: - http://www.dora.state.co.us/banking/ - 3038947575

Alert

According to a government action filed in California, this company is located in Kuala Lumpur, Malaysia. The address used in the company's Colorado Secretary of State business registration is a mailbox.