Aug 12, 2019 19:57 UTC
Aug 12, 2019 at 19:57 UTC
Zoptax And Unocall Get Cease And Desist Orders From “The Bureau” For Fraudulent Activities
Blockchain startups Zoptax and Unocall received emergency cease and desist orders from the New Jersey Bureau of Securities on Wednesday, August 7th.
This was the result of “Operation Cryptosweep”, an international effort focused on “fraudulent Initial Coin Offerings (“ICOs”) and cryptocurrency-related investment schemes”. According to the state’s press release, both companies were allegedly offering unregistered securities to retail investors.
The Bureau found that Zoptax was offering investors unregistered securities, to raise between $500,000 and $3.4 million, in the form of a cryptocurrency token- the ‘Zoptax Coin’- which are neither approved by the Bureau nor the Securities and Exchange Commission (SEC). The company was also reportedly making materially false and misleading statements regarding the offer and sale of its tokens.
UNOcall was found to be displaying misleading statements on their site, containing guarantees on investment returns of “0.18% – 0.88%” per day, through its staking program. This ICO and accompanying tokens were also not registered with authorities.
Gurbir S. Grewal, the State Attorney General, said,
“Today’s action demonstrates that our Bureau of Securities stands ready to enforce our investor protection laws in cases involving initial coin offerings and cryptocurrency-related investment schemes.”
Acting Director of the Division of Consumer Affairs, Paul R. Rodríguez said,
“The Bureau’s actions today, and the actions taken by other securities regulators during ‘Operation Cryptosweep,’ are a reminder to investors that while not every initial coin offering or cryptocurrency-related investment is fraudulent, there are significant risks involved with these products,… Investors must be on alert and not be tempted to invest in cryptocurrency-related investments without first vigorously vetting any transaction.”
In April 2018, a task force was organized by the North American Securities Administrators Association (NASAA), to begin investigations into ICOs and other cryptocurrency-related investments. It has already led to 85 pending or completed enforcement actions and 330 inquiries or investigations.