The SEC team from Colorado State ordered cease and desist on four Initial Coin Offerings(ICOs) for allegedly submitting unregistered securities. With this, a total of 12 crypto startups are forced to shut down their activities.
The so-called ‘ICO Task Force’ operation from Departement of Regulatory Agencies(DORA) of Colorado state started to probe on illegal activities in the month of May, particularly for crypto investors.
On Nov 8, the Securities Commissioner Gerald Rome signed an order for four ICOs – Bitcoin Investments, Ltd, PinkDate, Prisma and Clear Shop Vision Ltd.
In a public statement, Rome mentioned that,
We want 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.
Furthermore, he added that,
There are many companies in Colorado that are working hard to conduct their ICOs the right way, and we are eager to continue working with them to build a regulatory framework for the industry as it relates to securities
As it appears that, the investigation on these fraudulent activities started a few months back, but the results came after Colorado elected a crypto-friendly governor in Congressional Blockchain Caucus member Jared Polis.
The Bitcoin Investments company claimed that “the average registered investment return over a two month period in 2017 was an amazing 95 percent, while its ICO lists a number of celebrity promoters.”
With respect to Pinkdate, the company was “anonymously-operated, worldwide escorting service[s] and seeks to fundraise more than $5 million via an ICO in tokens referred to as PinkDate Platform (PDP)”. The statement says that the firm promises investors 50 percent of Net Profits through dividends in different cryptocurrencies
And with the Prisma, the company’s website requires users to buy its native crypto Prismacoin (PRIS) to use a proposed lending and arbitraging investment platform, through which investors could purportedly profit up to 27 percent on their initial investment. The “arbitrage bot” is claimed to generate returns of up to 1.5 percent daily.
Finally, the Clear Shop Vision, Ltd, reports being promoted three ICOs since June 2018 and offered “ORC Token” with a “serious appreciation potential.” The company’s site allegedly directs investors to send ETH directly to Clear Shop’s ETH wallet, but not through a crypto exchange.
All these stories indicate that alleged ICOs were trying to lure prospective investors with a maximum return of investment. But the SEC has ordered to take immediate action on all the reported ICOs.
Well, what do you think of this order by Colorado regulators? Share your thoughts in the comment section below.