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Operation Cryptosweep: 200 ICOs, cryptocurrency firms now under investigation

A resurgent initiative launched by the North American Securities Administrators Association is actively probing some 200 ICOs and cryptocurrency firms.

First announced in May this year, the North American Securities Administrators Association’s “Operation Cryptosweep” issued some 47 enforcement actions against Initial Coin Offerings (ICOs) and cryptocurrency firms – and now the initiative has confirmed investigations into more than 200 further ventures.

In a statement to the press, NASAA President and Alabama Securities Commission Director Joseph P. Borg quipped that “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”.

Most notably, several ICOs have been issued with warnings and legal action – earlier this month, the US Securities and Exchange Commission (SEC) announced that it has suspended all activity by the creator of  Tomahawkcoin owing to fraudulent behavior regarding its ICO.

The move followed earlier efforts this year, where the SEC issued a blitz of subpoenas and indictments on several ICOs and cryptocurrency ventures.

Borg elaborated to the press that cryptocurrency ventures will no longer be able to issue their offerings ‘in a vacuum’ – saying that “…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.”

Operation Cryptosweep is expected to continue with assistance from state and local regulators both at home in the United States, and abroad.

The SEC – in addition to other international regulators – may well have their work cut out for them. The research component of the Satis Group, a cryptocurrency and ICO advisory firm, released new research earlier this year – claiming that a shocking 81% of all ICOs surveyed in 2017 were identified as scams.