A global task force directed at securities violations within the crypto industry has begun active investigations into over 200 ICOs (initial coin offerings) and investment products.
“Operation Cryptosweep” which was first introduced in May by NASAA (North American Securities Administrators Association) has already brought 47 prosecutable actions against firms and ICOs offering crypto investment products within Canada and the U.S., earning a commendation from the Chairman, Jay Clayton of the SEC (Securities and Exchange Commission) in the process.
“State and provincial securities regulators are committing significant regulatory resources to protect investors from financial harm involving fraudulent ICOs and cryptocurrency-related investment products and also are raising awareness among industry participants of their regulatory responsibilities”, said NASAA President and Alabama Securities Commission Director Joseph P. Borg, adding, “While not every ICO or cryptocurrency-related investment is a fraud, it is important for individuals and firms selling these products to be mindful that they are not doing so in a vacuum; state and provincial laws or regulations may apply, especially securities laws. Sponsors of these products should seek the advice of knowledgeable legal counsel to ensure they do not run afoul of the law. Furthermore, a strong culture of compliance should be in place before, not after, these products are marketed to investors”.
The director of enforcement at the TSSB (Texas State Securities Board) Joseph Rotunda, said a statement via email that the inquiry had turned up a “staggering” amount of unlawful activity in the crypto space, which ranged from ICOs that had deceptively used the representations of Ruth Bader Ginsburg, a Supreme Court Justice and actress Jennifer Aniston in their advertising materials to investment marketers who had utilized stock videos to make it seem like the firm was operating three crypto mining farms.