The U.S. states of Colorado and North Dakota are working together with other states to fish out all crypto related frauds within its borders. The two states have recorded numerous success in the clamping down of companies promoting fraudulent initial coin offering in their states. The two states’ securities commission has issued several cease and desist orders in respect to this.
Too Good to be True Deals
These companies are generally known to offer unrealistic returns in exchange for investment in their schemes. One of the schemes recently served with a cease-and-desist order did promise to pay its investors a 10 percent return on their investment per month and they also claim that their coin price is pegged to the price of gold. This clearly shows that the coin operators have no idea of what they are talking about.
The securities commission of Colorado, through its Commissioner Gerald Rome, recently issued a cease and desist order target at two companies selling unregistered securities in the form of initial coin offerings (ICOs) in the state.
The two companies are: Davor and Cyber Capital Invest.
The two companies were accused of issuing tokens referred to as Davorcoin and CCI token respectively.
Rome stated that:
“the companies received the orders as a result of an investigation into potentially fraudulent securities offerings in Colorado in the form of ICOs,”
The securities commission has however made it known that the ICOs offered by the two companies are not registered in Colorado or exempt from registration. Regardless they went ahead to promote their investment scheme within the state.
The website dedicated to one of the ICOs, Davorcoin states that:
“The token is a new cryptocurrency aiming to become an alternative to coins such as bitcoin and ether”
The commission noted that Davorcoin also promised a return of up to 10% per month to participates of ‘staking pool’ along with a gold-pegged pricing feature.
On the Cyber Capital Invest’s website, it was stated that:
“the CCI token is a “profit share token”. Which in turn allows investors to receive a 100% assured daily return of between 0.75-2 % based on the “access level” they select. The company also offered a form of referral compensation scheme referred as “bounty program”.
North Dakota’s Securities Commission
The state of North Dakota on the order hand has recently issued a cease and desist order against three companies.
The commission stated that:
“The companies that are the subject of the orders are Crystal Token, Advertiza Holdings (Pty) Ltd., and Life Cross Coin.”
These companies are said to be acting in violation of the states” securities commission laws by offering its services to its residents.