US States Tackle Fraudulent Crypto and ICO Firms
The Alabama Security Commission (ASC) has recently taken enforcement actions in five investigations. This measure is part of “Operation Crypto-Sweep.” The NASAA (North American Securities Administrators Association) is the one coordinating the international crackdown on fraudulent Initial Coin Offerings (ICOs) and crypto-related investment products.
NASAA is a voluntary organization that has 67 members from state, provincial and territorial securities administrators in the US, Canada and Mexico. The ASC is also a member. An official announcement says that the commission has issued a total of five cease and desist orders “to protect Alabamians.”
ICO businesses that have been targeting residents in more than one state are the respondents. That is the reason why Alabama regulators formed a team with their colleagues from Texas and New Jersey to go after the firms involved in illegally soliciting investors.
The ASC director, Joseph Borg said, “Fraudulent activity involving ICOs and cryptocurrency-related investment products is a significant threat to Main Street investors in Alabama.” He later added while noting that the measures taken now are just the tip of the iceberg: the commission is “committed to swiftly and effectively protecting investors from schemes and scams involving these products.”
Cease and desist letters have already been sent to three Los Angeles based companies. In other states, regulatory authorities have also taken similar actions against such crypto businesses. The blockchain firm Shipchain that operates an Ethereum-based logistics platform was also handed a cease and desist order from the Office of the Attorney General of South Carolina.
Even though Shipcoin is said to be unregistered in South Carolina, it is said to be advertising its project to local investors. The state’s legislation treats investment contracts as securities and the tokens should have been registered as such. In North Carolina, a permanent cease and desist letter has also been delivered to a company – Power Mining Pool.
