Business

Gerald Fenech

Regulators bring down more ICOs in Colorado

State regulators in Colorado got tough with for more initial coin offerings (ICOs), putting a cease and desist order on them last week. This brings the total number of ICOs rebuked by the state to a dozen.

On its website, the state’s Division of Securities identified the four ICOs as Bitcoin Investments, Ltd., PInkDate, Prisma, and Clear Shop Vision Ltd. In an interview with CoinDesk, Colorado Securities Commissioner Gerald Rome said the crackdown is part of the agency’s effort “to ensure that the state’s securities market and the investors that operate within it are protected from unscrupulous actors that are taking advantage of the enthusiasm surrounding this field to perpetrate fraud and in some cases outright theft.”

He noted that the enforcement action is meant to advance Colorado as an “innovative leader” in the cryptocurrency space. Though the state’s ICO Task Force has been active since May, the cease-and-desist orders come several days after Colorado elected Jared Polis, a member of the Congressional Blockchain Caucus in the U.S. House of Representatives, as its new governor.

Aside from Colorado, other U.S. states are also taking action against potentially fraudulent token sales. Last week, Texas issued emergency cease and desist orders to crypto mining firms based in Australia and Canada. In October, the North Dakota Securities Department served a similar order to three firms that were discovered to be involved in promoting fraudulent securities and illegal business practices related to ICOs in the state.

A coalition of North American securities regulators, including the Colorado Division of Securities, is conducting more than 200 investigations as part of its “Operation Cryptosweep,” whose goal is to stifle cryptocurrency scams in the region.

Bob Webster of the North American Securities Administrators Association (NASAA), who plays a coordinating role in Operation Cryptosweep, said Colorado is among the more active jurisdictions in the U.S., along with Texas, North Dakota and Massachusetts.

“You’re starting to see now the results of those investigations,” according to Webster.

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