North Dakota’s Securities Commissioner Issues Orders Against 3 Companies Promoting ICOs
North Dakota Securities Commissioner Karen Tyler on Thursday, October 11 issued cease and desist orders against 3 companies that were found to be promoting unregistered and potentially fraudulent ICOs in the state.
North Dakota Securities Commissioner Karen Tyler on Thursday, October 11 issued cease and desist orders against Crystal Token, Advertiza Holdings (Pty) Ltd., and Life Cross Coin, which were found to be promoting unregistered and potentially fraudulent ICOs in the state.
Cease order issued after an investigation
The order by Tyler was issued after an investigation was carried out by the Department’s ICO Task Force which looked into ICOs and other crypto-related investments that pose a risk to North Dakota investors.
Following the investigation, three companies, Crystal Token, Advertiza Holdings (Pty) Ltd., and Life Cross Coin were found to be promoting ICOs that are unregistered, which could potentially be fraudulent.
While talking about the cease and desist order, Tyler stated that the continued exploitation of the cryptocurrency ecosystem by financial criminals is a significant threat to Main Street investors.
She added that financial criminals are taking advantage of the hype and excitement around blockchain, crypto assets, and ICOs. She cautioned investors to be very careful when considering a related investment.
Tyler also pointed out that the most common securities law violations by companies promoting ICOs include offering and selling to investors’ unregistered securities. Sales are also conducted by some unregistered agents, which is also considered to be fraudulent.
All three companies are not registered to sell securities
The agency in its report stated that none of the firms are registered to offer securities in the state.
The report also looked into what the companies offer. Crystal Token (CYL) is an ERC20 token that the company claims offers an evolutionary multi-utility token to trade in other cryptocurrencies.
On its official website, the company promises investors could earn daily interest up to 2%
The interest paid for investing in CYL token is paid using another token VCYL which is also issued by the company. The agency stated that Crystal Token is not registered to sell securities in North Dakota.
Advertiza Holdings meanwhile is looking for investors via its website which can be accessed by residents of North Dakota. The site offers investors a token called Tizacoin or TIZA by which they can invest in the company which offers digital advertisement services.
The company on its official website stated that TIZA could be purchased while the holders of the coin should expect to make a profit when the price of the cryptocurrency rises.
The securities agency stated that the company’s claims that TIZA is a utility token is wrong and that it is, in fact, a security. Advertiza claimed falsely that it has already made a filing with the SEC but it is still unregistered in the state to offer securities.
Life Cross Coin meanwhile uses a website that has a Berlin IP address associated with ransomware, Trojans, and identity fraud. The website claims that its token, LICO would be used to donate and support charitable organizations.
Their official website reveals that investors can purchase LICO in the ongoing ICO and receive a huge return on their investment by hodling the coin and selling it after a while.
The development team presented on the website are all fake names and they are yet to register in North Dakota to offer securities