An event hosted on Monday by the North America Security Administrators Association (NASAA) saw the much-anticipated crackdown on cryptocurrency scams put into effect. Dubbed “operation cryptosweep”, the operation is aimed at conducting a thorough scrutiny on dozens of potentially malicious cryptocurrency schemes which have been on the spot for collecting thousands of dollars from unsuspecting investors.
According to the state regulators, the crypto scams have been noted to target mainly unregistered security offerings. They promise interested investors of profitable earnings without exhaustively informing them of the imminent risks that are associated with the same. The crackdown will also focus on wary cases involving Initial Coin Offerings (ICOs)-a fundraising technique, similar to that of the initial public offering of stock used by both legitimate and illegitimate cryptocurrency projects.
Incites reveal that the international operation launched by a team of regulators from both the United States and Canada has as many as 70 investigations already commenced with approximately 35 others still pending or awaiting enforcement since the beginning of the month. “the actions announced today are just but a tip of the iceberg” said Frank Borger Gilligan- Tennessee Department of Commerce and Insurance(TDCI) assistant commissioner.. More and more detailed investigations are expected to be effected moving forward.
The efforts to crack down on these Ponzi cryptocurrencies gathered momentum back in April when NASAA established a task force to initiate a well-organized probe into cryptocurrency-related products as well as the Initial Coin Offerings (ICOs). Even though not directly stating, the stakeholders involved explained a scenario which revealed the relentless efforts which have been put in place to wipe out the crypto Ponzi fraud.
“We are putting ourselves in the shoes of the investors. We are seeing what is being promoted to investors. Then we are taking the next step to find out whether or not the cryptocurrencies are abiding by the security laws. “Added Joseph Borgn, the president of NASAA and the director of the Alabama Securities Commission by extension.
In their mission, investigators revealed approximately 30-000 cryptocurrency-related domain names most of which were registered the previous year. Most scams use slippery marketing materials, fake addresses and promise customers over 4% daily interest rates. More shocking is the fact that even some have gone a step further to use unauthorized photos of highly profiled individuals in their platforms to portray themselves a ‘good image’
It must be noted that not every cryptocurrency investment or ICO is fraudulent. The consumers however technically find themselves in higher risks of being scammed given the fact that investors who want to gain exposure to the currency will take any risk whatsoever to get there.