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US state regulator slaps ‘fraudulent’ ICOs with cease and desist orders

cryptocurrency regulator ICO

A US state regulator is cracking down on two New Jersey-based initial coin offerings (ICO) offering “fraudulent unregistered securities.”

The Bureau of Securities issued emergency cease and desist orders as part of “Operation Cryptosweep” – an international crackdown on fraudulent ICOs and cryptocurrency-related investment schemes – against Zoptax LLC (also known as Zoptax) and Unocall.

“Today’s action demonstrates that our Bureau of Securities stands ready to enforce our investor protection laws in cases involving initial coin offerings and cryptocurrency-related investment schemes,” said Attorney General Gurbir S. Grewal.

“As innovation in the online cryptocurrency-related investment market continues, market players need to understand that the rules still apply to them,” he added.

According to the Bureau, Zoptax was offering investors unregistered securities through its website in the form of an ICO and using a cryptocurrency called Zoptax Coins.  It was also looking to raise between $500,000 and $3.4 million through its ICO.

Unocall was looking to launch an ICO of its Unocall token, and offering customers the opportunity to purportedly earn a guaranteed interest of “0.18 – 0.88percent” per day.

It was looking to build an ecosystem which would offer users the chance to buy and trade Unocall tokens, altcoins, and fiat currencies through their UNOpay Mobile Wallet.

The taskforce, which was first set up in April 2018, has so far launched more than 130 new investigations of ICOs and cryptocurrency-related investment products and completed 35 enforcement actions.

This is a stark reminder that, although regulators are facing a tough job when it comes to controlling what happens in the cryptocurrency market, they do often rise up to the challenge.

Published August 8, 2019 — 08:34 UTC