‘Operation Cryptosweep’ Investigates over 200 ICOs

The North American Securities Administrators Association (NASAA), announced yesterday that the investigative initiative known as Operation Cryptosweep would extend to more than 200 active Initial Coin Offerings (ICOs) investigations and businesses related to blockchain and crypto technologies in general.

The Agency announced this in a press release published on its official website. In it, Mr. Joseph Borg, NASAA President and Alabama Securities Commission Director, mentions that efforts have been hard not only to find potential scammers but also to avoid such cases in the community:

“State and provincial securities regulators are committing significant regulatory resources to protect investors from financial harm involving fraudulent ICOs and cryptocurrency-related investment products and also are raising awareness among industry participants of their regulatory responsibilities,”

Mr. Borg commented that it is important to conduct a study of the legal framework before launching a business involving the use of cryptocurrencies. Although there is a perception that this is an unregulated market, the reality is that – like any other financial business – there are many obligations that must be met and that in many cases are unknown to investors:

“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.”

“Just The Tip of The Iceberg”

Operation Cryptosweep was launched in May 2018 as an initiative to combat a wave of fraud and legal problems emerging in the world of business finance involving the use of cryptocurrencies.

At the time, the security agencies commented that the announcement was “just the tip of the iceberg.” According to Mr. Borg, approximately 30,000 crypto-related domain name registrations were found for further analysis.

Mr. Borg concluded with a call to the general public to be very careful when investing in cryptos and ICOs. Generally, a little investigation is enough to detect a shady project, but when in doubt, it is always possible to have the support of the competent authorities:

“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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