More than 200 Initial Coin Offerings (ICO’s) and other investment products related to crypto are now under investigation by North American Securities Administrators Association. This was announced on August 28, in relation to their initiative dubbed as “Operation Cryptosweep”.
This ongoing initiative of NASAA started in May 2018 by the U.S. and Canada’s government securities regulators which digs into possible fraudulent crypto programs.
According to Joseph Borg, Director of Alabama Securities Commission, regulators discovered a lot of cryptocurrency related activities which violated the state securities policies. These violations include offering products that are not even registered.
“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.” Borg said.
NASAA’s announcement also stated that “in order to provide some measure of protection for investors, any project qualified as a security should be registered with the appropriate regulatory agencies, or apply for an exemption from registration”
The association also noted that investors need to be cautious with due diligence before putting their money in ICO’s as even products that are already registered can still be fraudulent.
Since May, almost 30,000 domains related to cryptocurrencies were found out by the investigators wherein most of these were set up when the price of a Bitcoin has hit an all-time high of $20,000. In an update, regulators of “Operation Cryptosweep” have already 46 legal actions taken against the violators.