In what believed to be the biggest co-ordinated action by state and provincial regulators in the US and Canada, the North American Securities Administrators Association (NASAA) announced that it has commenced hunting for fraudulent Initial Coin Offerings (ICOs), cryptocurrency-related investment products and those behind them.
Dubbed Operation Cryptosweep, the joint effort has already investigated nearly 70 cases, with 35 pending or completed enforcement actions related to ICOs or cryptocurrencies since the beginning of May.
NASAA president and Alabama Securities Commission director Joseph Borg said the rampant cases of fraud in the crypto ecosystem have been a threat to Main Street investors in the United States and Canada.
"Despite a series of public warnings from securities regulators at all levels of government, crypto criminals need to know that state and provincial securities regulators are taking swift and effective action to protect investors from their schemes and scams," he said.
Just recently, the Ontario Securities Commission (OSC) has named five firms which were believed to be involved in suspicious schemes of encouraging investors to trade and invest in digital currencies.
According to the regulator, BTCReal, BitSerial, Hypercube Ventures, CabinCoin OÜ, and BaapPay Inc., are not registered in Ontario to solicit investments or provide advice on investing in, buying, or selling securities.
OSC provided the following details on the five mentioned firms:
- BTCReal manages the website btcreal.biz, where it claims to provide full investment services for cryptocurrency-related investments and forex. BTCReal claims it can provide investors with high returns in short periods of time.
- BitSerial operates the website bitserial.io, which claims to offer opportunities to invest in “BTE Tokens.” BitSerial’s website also encourages investors to participate in a lending program where they can exchange Bitcoin, Litecoin, or Ethereum for BTE Tokens that are “lent out” for high returns.
- Hypercube Ventures LP manages the websites hypercube.vc, hypercube.fund, vnn.money and vnn.cash, which encourage investors to buy “emission pools” for the purpose of generating “VNN cryptocurrency.”
- CabinCoin OÜ operates the websites cabincoin.com and cabincoin.exchange, and is currently advertising an unregistered token sale for “CabinCoin Tokens.” CabinCoin claims that the future value of these tokens will far exceed their initial price.
- BaapPay Inc. manages the website baappaytoken.com, and is also currently advertising an unregistered token sale.
OSC urged investors to consider the risks associated with cryptocurrencies. It warned that promises of high returns usually indicate fraud.
Meanwhile, NASAA said the regional crackdown on fake ICOs and cryptocurrency-associated investment products is part of its efforts to raise public awareness.
“Not every ICO or cryptocurrency-related investment is fraudulent, but we urge investors to approach any initial coin offering or cryptocurrency-related investment product with extreme caution," Borg said.