The crypto community has had to deal with its fair share of legal and regulatory action lately the latest being North Dakota Securities Commissioner Karen Tyler issuing cease and desist orders against three firms for allegedly offering unregistered and fraudulent securities in the form of Initial Coin Offerings (ICOs), according to an announcement published Oct. 11. The orders by the North Dakota commissioner have been issued against Advertiza holdings (pty) Ltd, crystal Token, and life cross coin also known as lifecrosscoinGmbH. The statement on the order describes crystal tokens as an evolutionary multi-utility ERC-token promising earnings of up to 2 percent daily. Crystal token’s website contains a lot of fraudulent claims of exaggerated rates of return and on top of that, the token is not authorized to sell securities in North Dakota.
Advertiza holdings offer a token called “Tizacoin” or “TIZA” and claims that holders of this coin can expect gains due to the appreciation of the token. The regulator argues that the assertion that the token was a utility token was false instead stating that the token was a security. According to the commission, Advertiza claims to be registered with the SEC while it actually is not, the firm is also not registered to sell securities in North Dakota. The third firm, life cross coin, operates a website from a Berlin IP address linked to malware, ransomware and identity fraud. The firm offers a crypto known as Life cross coin also known as LICO. Just like the other two mentioned before, the token is not registered in North Dakota and its site reportedly contains unsubstantiated claims and obvious misrepresentations.
In her cease and desist order, Tyler stated that “The continued exploitation of the cryptocurrency ecosystem by financial criminals is a significant threat to Main Street investors. In formulaic fashion, financial criminals are cashing in on the hype and excitement around blockchain, crypto assets, and ICOs – investors should be exceedingly cautious when considering a related investment.”the cease and desist order is part of a coordinated multi-jurisdictional probe set up to nab fraudulent crypto investment startups dubbed “operation cryptosweep”.
The investigating team involves 40 US and Canadian state and provincial regulators. Since the probe team began working, it has discovered about 30,000 crypto-related domain names conducting over 200 ICO investigations. As part of the investigations, the Colorado securities commissioner launched probes into two companies namely California based Linda healthcare corp and Washington based broad investments LLC for the promotion of Unlawful ICOs.
