U.S. and Canadian state securities regulators announced yesterday that they had launched probes into fraudulent cryptocurrency investment programs and Initial Coin Offerings (ICOs).
The North American Securities Administrators Association (NASAA) announced the diversified series of investigations on Monday, May 21, dubbed “Operation Crypto-Sweep.”. Crypto-Sweep will see over forty United State and Canadian regulators united with the common goal of cracking down on suspicious crypto investment products.
As reported by Cointelegraph in Jan-2018, NASAA released a warning for Main Street investors regarding the risks associated with digital currencies and ICOs.
The president of NASAA, Joe Borg, noted that there had been over 60 probes and additional 35 enforcement actions made this month alone. Borg then continued to state that Regulators need to be alert and “stay one step ahead” of any potential security loophole and Violations.
Borg went on to address the formation of the Crypto-Sweep:
“ We’re putting ourselves in the shoes of investors. We’re seeing what’s being promoted to investors. And then we’re taking the next step and then we’re finding out whether they’re complying with securities laws.”
Alleged Schemes have reportedly used websites that relied on fake photos and addresses to appear legitimate when seeking investors. Regulators have already sent cease and desist letters to several alleged scams. NASAA Officials stated that there will be additional enforcement actions to come against companies looking to defraud cryptocurrency investors.
NASAA is the oldest international investor protection organization. Founded in 1919, NASAA is a formal association of state and provincial-level securities regulators in the U.S., Mexico, and Canada.
The move by state Watchdogs to clamp down on cryptocurrency fraud comes amid mounting attention to cryptocurrencies by federal regulators, including the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).