Securities regulators in states and provinces inside the U.S. and Canada recently launched investigations into what some believe are fraudulent crypto investment enterprises. Named "Operation Cryptosweep," this push is said to be the most significant initiative of its type in terms of coordination between provincial and state authorities.
Since the North American Securities Administrators Association (NASAA) worked to coordinate a team of regulators spanning 40 distinct jurisdictions, upwards of 70 investigations have begun, with more anticipated in the near future. This comes on the heels of reports that roughly 35 companies have been issued warnings by securities regulators regarding potential breaches of the law, with certain cases triggering cease-and-desist efforts. NASAA dates back to 1919 and is known for its activity in coordinating cross-jurisdictional enforcement actions and for sharing information among key agencies.
The Association previously advised that investors exercise real caution due to the dangers surrounding cryptocurrencies and initial coin offerings (ICOs) that appeared to be of a suspicious nature. During the investigatory process, approximately 30,000 domain names connected in some fashion to cryptocurrency trading were registered in 2017, the time period in which Bitcoin prices soared to historic highs.
Some of the fraudulent activity with which the investigation is concerned was characterized by the use of false addresses, inflated daily interest rate guarantees, hyperbolic marketing techniques and the appearance of falsified celebrity endorsements.
The United States Securities and Exchange Commission announced in May that it had instituted a website designed to grow awareness of fraudulent ICOs and to facilitate greater understanding among eager investors. It should be noted that while regulators are certainly taking an aggressive stance when it comes to investigating fraudulent cryptocurrency opportunities and ICOs, there are investments in this realm that are wholly legitimate and not in violation of any state, federal or provincial law.