State and Provincial Securities Regulators Conduct Coordinated International Crypto Crackdown

Borg: “The actions announced today are just the tip of the iceberg.”

WASHINGTON, D.C. (May 21, 2018) – The North American Securities Administrators Association (NASAA) today announced one of the largest coordinated series of enforcement actions by state and provincial securities regulators in the United States and Canada to crack down on fraudulent Initial Coin Offerings (ICOs), cryptocurrency-related investment products, and those behind them.

NASAA members from more than 40 jurisdictions throughout North America participated in “Operation Cryptosweep,” which to date has resulted in nearly 70 inquiries and investigations and 35 pending or completed enforcement actions related to ICOs or cryptocurrencies since the beginning of May. NASAA members are conducting additional investigations into potentially fraudulent conduct that may result in additional enforcement actions. These actions are in addition to more than a dozen enforcement actions previously undertaken by NASAA members regarding these types of products. Many NASAA members also are conducting public outreach initiatives to warn investors in their jurisdictions of the risks associated with ICOs and cryptocurrencies.

“The persistently expanding exploitation of the crypto ecosystem by fraudsters is a significant threat to Main Street investors in the United States and Canada, and NASAA members are committed to combating this threat,” said Joseph P. Borg, NASAA President and Director of the Alabama Securities Commission. “Despite a series of public warnings from securities regulators at all levels of government, cryptocriminals need to know that state and provincial securities regulators are taking swift and effective action to protect investors from their schemes and scams.”

In April 2018, NASAA organized a task force of its member state and provincial securities regulators to begin a coordinated series of investigations into ICOs and cryptocurrency-related investment products. Regulators identified many cryptocurrency-related products and as part of its work, the task force identified hundreds of ICOs in the final stages of preparation before being launched to the public. These pending ICOs were advertised and listed on ICO aggregation sites to attract investor interest. Many have been examined and some were determined to warrant further investigation. A number of these investigations are ongoing and others resulted in enforcement actions announced today.

“The actions announced today are just the tip of the iceberg,” Borg said, noting that the task force also found approximately 30,000 crypto-related domain name registrations, the vast majority of which appeared in 2017 and 2018.

A critical component of “Operation Cryptosweep” is raising public awareness of the risks associated with ICOs and cryptocurrency-related investment products. “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.

For more information about ICOs and cryptocurrencies, watch NASAA’s video “Get in the Know About ICOs” or read NASAA’s Investor Advisories: “What to Know About ICOs” and “Be Cautious of the Crypto Investment Craze.”

 

Operation Cryptosweep
Enforcement Actions & Activities

RESPONDENT AGENCY TYPE OF ACTION
Adosia LLC North Carolina Secretary of State – Securities Division Consent Order
Antivolatility Coin,
ZZZ Coin,
Power Invest Group,
Frank Bernier William Bolduc
Autorité des marchés financiers (AMF) – QUEBEC (CANADA) Cease & Desist Order
Baltic Fund Office of Missouri Secretary of State Securities Division Order to Cease & Desist and Order to Show Cause
Bionic Indian Office of the Secretary of State, Securities Division Cease & Desist Order
Bitcoin Trading & Cloud Mining Limited AKA BTCRUSH, Jaylon Cross, Bruce Rodgerson, Robin Lozinski and Thomas A. Johnson Texas State Securities Board Emergency Cease & Desist Order
Blue Vase Mining Massachusetts Securities Division Consent Order
Broad Investments, LLC, and Guoyong Liu The State of Colorado Division of Securities Cease & Desist Order and Order to Show Cause
Browsers Lab, LLC Maryland Office of the Attorney General,  Securities Division has Summary Order to Cease and Desist and Order to Show Cause
Bullcoin Foundation a/k/a/ Bullcoin Gold New Jersey Bureau of Securities, Office of the New Jersey Attorney General Summary Cease & Desist Order
 Chain Group Escrow Service Alabama Securities Commission Cease & Desist Order
 Cryptocashback  c/o Kapsus Technologies Ltd. British Columbia Securities Commission  Cease & Desist Letter
Cryptosecure New Brunswick Financial and Consumer Services Commission Cease & Desist Letter
DasCoin British Columbia Securities Commission Cease & Desist Letter
Digitalticks British Columbia Securities Commission Cease & Desist Letter
Disciplina British Columbia Securities Commission Cease & Desist Letter
Doctailor British Columbia Securities Commission Cease & Desist Letter
 Extrabit Ltd; Mack Deacon  Alabama Securities Commission Cease & Desist Order
Forex EA & Bitcoin Investment LLC AKA My Forex EA & Bitcoin Investment LLC AKA My Forex EA, James Butcher and Richard Dunn  Texas State Securities Board Emergency Cease & Desist Order
 Krios British Columbia Securities Commission  Cease & Desist Letter
Leverage Alabama Securities Commission Cease & Desist Order
Linda Healthcare Corporation Co. and Arturo Devesa The State of Colorado Division of Securities Cease & Desist Order and Order to Show Cause
Platinum Coin; Roman Dinkevich; Sergei Cherepanov, Vladimir Gorshkov, Andrey Malevanchuk, Roman Terekhin Alabama Securities Commission Cease & Desist Order
Pooltrade; Harold Theron Alabama Securities Commission Cease & Desist Order
Power Mining Pool North Carolina Secretary of State – Securities Division Permanent Cease and Desist Order
ShipChain, Inc. Office of the South Carolina Attorney General, Securities Division Administrative Cease & Desist Order
Sigil Platform British Columbia Securities Commission Cease & Desist Letter
Springcryptoinvest a/k/a Springcryptoinvest.com Ltd. New Jersey Bureau of Securities, Office of the New Jersey Attorney General Summary Cease & Desist Order
Taklimakan Network British Columbia Securities Commission Cease & Desist Letter
ThinkCoin British Columbia Securities Commission Cease & Desist Letter
Trident d/b/a Trident Crypto Index Fund New Jersey Bureau of Securities, Office of the New Jersey Attorney General Summary Cease & Desist Order
Tripbit British Columbia Securities Commission Cease & Desist Letter
Ubcoin British Columbia Securities Commission Cease & Desist Letter
USI-Tech Ohio Department of Commerce – Division of Securities Administrative Cease & Desist (Notice Order)
Wind Wide Coin Inc. AKA WWC Inc., Charles Roman, Fred Andrew and John Anny Texas State Securities Board Emergency Cease & Desist Order
ADDITIONAL ACTIVITIES  AGENCY ACTIVITY
Binance Limited The Investor Protection Bureau of the Office of the New York State Attorney General Information Demand Letter
BIOK Nova Scotia Securities Commission  Investor Alert
bitFlyer USA, Inc. The Investor Protection Bureau of the Office of the New York State Attorney General Information Demand Letter
Bitstamp USA Inc. The Investor Protection Bureau of the Office of the New York State Attorney General Information Demand Letter
Bittrex, Inc. The Investor Protection Bureau of the Office of the New York State Attorney General Information Demand Letter
Circle Internet Financial Limited (Poloniex LLC) The Investor Protection Bureau of the Office of the New York State Attorney General Information Demand Letter
Coinbase, Inc. The Investor Protection Bureau of the Office of the New York State Attorney General Information Demand Letter
Elite Way Developments LLP The Investor Protection Bureau of the Office of the New York State Attorney General Information Demand Letter
Gate Technology Incorporated The Investor Protection Bureau of the Office of the New York State Attorney General Information Demand Letter
Gemini Trust Company The Investor Protection Bureau of the Office of the New York State Attorney General Information Demand Letter
Huobi Global Limited The Investor Protection Bureau of the Office of the New York State Attorney General Information Demand Letter
iFinex Inc. (Bitfinex)  The Investor Protection Bureau of the Office of the New York State Attorney General  Information Demand Letter
itBit Trust Company  The Investor Protection Bureau of the Office of the New York State Attorney General  Information Demand Letter
Orca Alliance Nova Scotia Securities Commission  Investor Alert
Payward, Inc. (Kraken) The Investor Protection Bureau of the Office of the New York State Attorney General Information Demand Letter

 

 

For More Information:
Bob Webster | Director of Communications
202-737-0900

 

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