State regulators investigating more than 200 ICOs and cryptocurrency investments

State regulators investigating more than 200 ICOs and cryptocurrency investments
NASAA's Operation Cryptosweep has resulted in 47 enforcement actions since its launch in May.
AUG 28, 2018

The North American Securities Administrators Association is investigating more than 200 initial coin offerings and cryptocurrency-related investment products for fraud and other violations of state and provincial securities laws, in an initiative called Operation Cryptosweep. Since its launch in May, Operation Cryptosweep, which coordinates the investigations with state and provincial securities regulators in the United States and Canada, has resulted in 47 enforcement actions. While some of the active investigations entail suspected securities fraud, Joseph P. Borg, NASAA president and director of the Alabama Securities Commission, said in a statement that many of the investigations relate to whether the investments violate state and provincial securities laws. Many ICO or cryptocurrency-related investment products are not properly registered with regulatory agencies. "Sponsors of these products should seek the advice of knowledgeable legal counsel to ensure they do not run afoul of the law," Mr. Borg said. (More: Cryptocurrency deals receive increased scrutiny by SEC) Registering investment products with the appropriate agencies provides some protection for investors. However, even registered investment products can be fraudulent and Mr. Borg suggests investors do their homework before investing in an ICO or cryptocurrency-related investment products. "Be cautious when dealing with promoters who claim their ICO offering is exempt from securities registration but do not ask about your income, net worth or level of investing sophistication," he said. (More: Crypto...what?)

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