‘Operation Cryptosweep’ looking into 200 initial coin offerings
The North American Securities Administration Association (NASAA), which launched its ‘Operation Cryptosweep’ this year has expanded the number of investigations into initial coin offerings to 200 from 70 active cases in May. NASAA is the oldest international organization devoted to investor protection and it’s a voluntary association comprising of 67 provinces, states, and territories across the U.S., Mexico, and Canada.
According to a report by Autonomous Next, initial coin offerings (ICOs) have raised $12 billion this year alone which is a significant rise to the $7.4 billion in 2017.
Since its launch ‘Operation Cryptosweep’ has already brought 47 enforcement actions against ICOs and firms offering cryptocurrency investment products in the U.S. and Canada, earning high praise from Securities and Exchange Commission (SEC) Chairman Jay Clayton in the process.
“State and provincial securities regulators are committing significant regulatory resources to protect investors from financial harm involving fraudulent ICOs and cryptocurrency-related investment products and also are raising awareness among industry participants of their regulatory responsibilities,” said NASAA President and Alabama Securities Commission Director Joseph P. Borg in a statement.
Need for initial coin offerings to be regulated
Financial watchdogs and regulatory authorities have been split on how the initial coin offerings should be regulated and the NASAA investigation was put in place to protect retail investors from any fraudulent activity offered by these firms.
“While not every initial coin offering or cryptocurrency-related investment is a fraud, it is important for individuals and firms selling these products to be mindful that they are not doing so in a vacuum; state and provincial laws or regulations may apply, especially securities laws. Sponsors of these products should seek the advice of knowledgeable legal counsel to ensure they do not run afoul of the law. Furthermore, a strong culture of compliance should be in place before, not after, these products are marketed to investors,” he added.
The most striking factor of this investigation is that eleven of these enforcement actions have been levied by regulators in Texas. The State Securities Board has reported that it has halted schemes in which companies claimed to have raised billions of dollars from investors.
The job is far from complete but the authorities are leaving no stone unturned in ensuring investors safety and instilling confidence in this volatile market of investments tied to cryptocurrencies.
Image via Shutterstock
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