Fraudulent ICOs Are Still Around

August 12, 2019

Fraudulent ICOs Are Still Around: New Jersey Regulator Just Froze Two of Them


After the ICO trend boomed back in 2017, it quickly started seeing its fair share of problems. Not only were there all kinds of projects emerging everywhere in the world - many of them weak and without a clear idea of what to do next — but many of them ended up being scams. This is not particularly surprising, as scammers are known to follow the money, and ICOs raised a lot of it two years ago.

Numerous other issues, like the fact that most coins are considered to be securities, caused the US regulator, the SEC, to intervene, and the infamous ICO crackdown took place. Because of this, as well as the drop in prices during 2018's year-long bear market, the ICO model nearly went extinct. Now, it seems like it made a comeback, although not as strongly as before.

However, the ICO is not the only thing that had returned with price recovery, as fake promises made by scammers can still be encountered today, as well. In fact, the New Jersey securities watchdog recently interfered after identifying two of them, immediately sending cease-and-desist order and breaking the token sale.

The two fake ICOs were known as Unocall and Zoptax, and they were trying to raise funds from retail investors via an online token offering. However, along the way, they triggered legislation against the sale of unregistered securities. According to the New Jersey regulator, both projects' coins were actually unregistered securities, and the projects were promising large payouts to those who choose to buy their tokens.

Gurbir S. Grewal, the Attorney General, stated that the regulator's recent actions demonstrate that the New Jersey watchdog stands ready to protect investors in case of unlawful ICOs and other crypto-related schemes. He added that the innovation in the crypto-related investment market should not let the market players forget that the rules still apply to everyone involved.

New Jersey regulator hunting fake ICOs via a special task force


Of course, this was not the first time that the state's regulator had interfered in fake crypto offers. Fraudulent ICOs often use aggressive, direct persuasion methods, which makes them rather easy to spot. The worst part is that they are targeting small-scale investors, who cannot protect themselves. This is why the Attorney General of New Jersey launched a special task force back in April 2018. The task force focused on inspecting token sales, seeking out fraud and breaking up fundraising.

In January 2019, this drive to check crypto projects evolved into Operation Cryptosweep. So far, the task force seems to have been very successful, opening as many as 85 enforcement actions on various crypto projects and ICOs. They made over 330 inquiries and investigations in regards to projects registered in Canada and the US, meaning that nearly one-fourth was breaking the law in one way or another.

As mentioned, the ICO sector is now significantly slower than back in late 2017, and most investors are far more likely to participate in IEOs (Initial Exchange Offerings). However, ICOs are still not gone completely, and there are people willing to try their luck and invest in them, even though these are mostly small-scale investors.

Bureau Chief, Christopher W. Gerold, believes that the refreshed interest in ICO investing comes as a consequence of the increase in the price of Bitcoin, as well as the announcement of Facebook's Libra. New investors are not aware of the danger, and even some of the older ones can be tricked by these projects, which is why the regulators once again urge caution.

Author: Ali Raza for: Crypto-Rating.com
Cryptocurrency: Ethereum
Share
Pin
Send
Share
Share

New regulatory guidelines for cryptoexchanges
New regulatory guidelines for cryptoexchanges

The need for a functional regulatory framework that would properly address digital currencies has been stronger than ever in countries around the world. While many governments and their...

SEC collects over $4 billion from penalties in 2019
SEC collects over $4 billion from penalties in 2019

The United States' securities regulator, the US SEC, has just released its annual report for the fiscal year 2019. According to the report, the regulator received...

Lottery Winner Invests Half In Bitcoin
Lottery Winner Invests Half In Bitcoin

Anyone who buys a lottery ticket dreams of hitting a massive jackpot, but very few have an actual plan of what they are going to do should the money land in the bank account. Nearly all of them...


Libra Scare: EU Reveals EuroCoin Draft
Libra Scare: EU Reveals EuroCoin Draft

The looming release of Libra appears to have scared the European government and financial authorities straight, as they are now even considering the issuance of digital currency...

Blockchain can reduce Fraud rate
Blockchain can reduce Fraud rate

Fraud is certainly a strong issue for most businesses in the world. However, a revolutionary technology like Blockchain can change things for the better. Those who are still struggling to deal...

Another Asian crypto exchange hacked
Another Asian crypto exchange hacked

While the Asian region is famous for its crypto acceptance and advanced technology, it is also quite infamous for numerous crypto exchange hacks that have occurred...


Top 5 Movies & Documentaries About Bitcoin
Top 5 Movies & Documentaries About Bitcoin

Bitcoin, as well as all cryptocurrencies in general, has made a move from being the little known invention that is discussed in a closed circle of "crypto geeks" to becoming a global...

Veritaseum ICO investors to receive compensation
Veritaseum ICO investors to receive compensation

The US SEC ICO crackdown continues, with the regulator continuously resolving one case after another. The most recent ruling of the regulator concerns...

Top 10 upcoming ICOs

ICO Start End
1 Ledder Aug 01 Dec 31
2 BitWings Jun 03 Nov 30
3 Pbet Jun 18 Dec 15
4 UCBI Banking Oct 18 Jan 18
5 Cinemadrom Feb 03 Apr 30
6 Yachtco Aug 04 Feb 04
7 GOVEARN Jun 23 Dec 31
8 BrandProtect Apr 27 May 31
9 PointPay Jul 22 Jul 22
10 WINBIX Jul 01 Sep 28
All ICOs

Top 10 Crypto Brokers

Rank Status Broker Reviews
1 FXTM information
2 HYCM information
3 FIBO Group information
4 HotForex information
5 XM information
6 OctaFX information
7 easyMarkets information
8 LH Crypto information
9 USGFX information
10 Markets.com information
All Crypto Brokers

Top 10 Cryptocurrencies

Currency Price, USD 24h
1 Bitcoin 8 704.792 -1.26%
2 Ethereum 185.270 -1.77%
3 XRP 0.270 -1.69%
4 Bitcoin Cash 278.793 -2.75%
5 Tether 1.006 0.04%
6 Litecoin 59.658 -2.65%
7 Binance Coin 21.118 -1.13%
8 EOS 3.402 -1.99%
9 Bitcoin SV 126.623 -1.55%
10 Stellar 0.075 -2.89%
All Crypto Currencies

Top 10 Crypto Exchanges

Exchange Volume, USD Reviews
BitMEX 3 069 312 071
EXX 2 250 568 625
Biki 1 853 598 655
BKEX 1 851 309 394
P2PB2B 1 753 668 584
CoinEx 1 597 757 171
Fatbtc 1 566 375 344
Binance 1 554 730 819
LBank 1 544 760 848
MXC 1 452 207 912
All Crypto Exchanges