The Colorado Division of Securities continues with the cease-and-desist orders against allegedly fraudulent initial coin offerings. Four new orders have been signed by the states’ Securities Commissioner Gerald Rome, which brings their count to 18 in the state of Colorado alone.
Rome signed the new orders against Credit LLC, Global Play Net, CyberSmart Coin Invest and CrowdShare Mining for allegedly publishing misleading statements on their websites with false promises to defraud investors, which included unverified data, claims of excessively high profits, misrepresentation of facts, and insufficient disclosures. These orders follow after this Monday order issued by the North Dakota’s securities regulator against a Russian-based ICO that promoted unregistered securities by impersonating Liechtenstein-based Union Bank AG.
The orders are the results of investigations carried out by the ICO Task Force set up in May 2018 within the Department of Regulatory Agencies to look into unlawful activities targeting cryptocurrency investors in Colorado.
The Colorado Securities Commissioner Gerald Rome commented on these developments by stating that the number of orders issued against ICOs should serve as a “red flag” for all investors, and that the ICO they are currently considering could well be a fraud. He further added:
“Our investigations show that there are fraudsters who will simply create a fake ICO to steal investors’ money, or spoof a legitimate ICO to trick investors into wrongfully paying them.”
The effort is part of Operation Cryptosweep, a coordinated multi-jurisdiction investigation and enforcement effort involving over 40 U.S. and Canadian securities regulators.