North American regulators have revealed that more than 200 cryptocurrency-related cases are being actively investigated, with 46 enforcement actions taken. The coordinated efforts by over 40 jurisdictions in the U.S. and Canada are part of Operation Cryptosweep, aimed at cracking down on unregistered and fraudulent crypto-related investment products.
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200+ Cases, 46 Enforcement Actions
The North American Securities Administrators Association (NASAA) announced Tuesday that “more than 200 active investigations of initial coin offerings (ICOs) and cryptocurrency-related investment products are currently underway by state and provincial securities regulators in the United States and Canada.”
These investigations are part of the association’s ongoing coordinated regulatory initiative called Operation Cryptosweep, which was launched in May. At that time, the NASAA revealed that its “members from more than 40 jurisdictions throughout North America participated” in this effort, which resulted in at least 70 investigations. According to Tuesday’s announcement:
Since its launch in May, this ongoing coordinated regulatory focus has resulted in 46 enforcement actions involving ICOs or cryptocurrency-related investment products.
NASAA is a voluntary association whose members are securities administrators from states, provinces, and territories in the 50 U.S. states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada, and Mexico.
ICO Teams Told to Seek Legal Counsel
The president of the association and Alabama Securities Commission Director, Joseph P. Borg, commented:
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.
Borg then advised sponsors of these products to seek “the advice of knowledgeable legal counsel to ensure they do not run afoul of the law,” emphasizing compliance before offering or marketing these products to investors. He also noted that products that qualify as securities must be registered with the appropriate regulatory bodies unless exempted from registration.
“The registration process provides some protection for investors by subjecting the offering to regulatory review. But even registered offerings can be fraudulent. Investors therefore should perform their own thorough due diligence before investing in any ICO or cryptocurrency-related product,” the NASAA reiterated.
Borg concluded that investors need to:
Be cautious when dealing with promoters who claim their ICO offering is exempt from securities registration but do not ask about your income, net worth or level of investing sophistication…Do your homework and contact your state or provincial securities regulator with any concerns before parting with your hard-earned money – afterwards may be too late.
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Images courtesy of Shutterstock and NASAA.
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