As a part of ‘Operation Crypto-Sweep’, the Alabama Securities Commission (ASC) has issued five Cease and Desist Orders to protect Alabamians. The operation is led by NASAA focusing on blockchain startups and ICO projects suspecting violations and fraudulent activities on securities laws.
NASAA (North American Securities Administrators Association, the voluntary organization in which ASC is also a member. It is coordinated with ‘Operation Crypto Sweep’. Recently, ASC has taken enforcement actions by issuing five Cease and Desist orders to protect Alabamians.
Joseph Borg, ASC director;
“Fraudulent activity involving ICOs and cryptocurrency-related investment products is a significant threat to Main Street investors in Alabama. The Commission is “committed to swiftly and effectively protecting investors from schemes and scams involving these products”.
However, Cease and Desist letter have been sent to fives crypto based companies:
- Extrabit Ltd. cryptocurrency mining farm, in which an unregistered and illegal securities offerings were conducted. Since, the investors were asked to spend $20,000 in the presale and tokens were expected within 2 days. However, 185% quarterly return was supposed sustain positive EXB balance. Moreover, returns were said to come from mining Bitcoin, Monero and Zcash.
- Leverage, the California based firm, the crypto platform offers investors a variable, daily interest. However, the ASC claim, the case is about unlicensed security.
- Pool Trade, is the third sanctioned company from LA, which was involved in offering unregistered securities.
- Platinum Coin, Florida based, crypto business had caught offering investors an annual return of 320 percent. However, the firm was conducting sales of unregistered securities.
- Chain Group Escrow, Washington based have been hit with cease and desist according to ASC.
On May 1st, the NASAA (North American Securities Administrators Association) have launched the ‘Operation Cryptosweep’, the enforcement action. However, it includes entire US states and securities agencies in Canada and about 70 investigations and pending 35 enforcement actions.
Remarkably, last year Texas which had started its own crypto offerings investigations now leads in handling, consolidating and coordinating the NASAA sweep.
Since, Dec, 20, 2017, the three enforcement order have already been entered from the start of the sweep by Texas Securities Commissioner, Travis J.Iles. Besides, the State Security Board has taken 10 actions against illegal crypto promoters.
Director of the Enforcement Division of the Texas Securities Board and the Vice-Chair of the Enforcement Section for NASAA, Joseph Rotunda said,
“Although the task force’s work is far from complete, my suspicions have already been confirmed. The market for cryptocurrency investments is saturated with widespread fraud, and our work is only revealing the tip of the iceberg”.
However, Texas was the first country to promote crypto offerings. Thus, NASAA and SSB member agencies will sustain to investigate crypto investment schemes.