New ICOs Banned In North Dakota

Dawid Paluch
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The North Dakota Securities Department have found out that three companies promoting Initial Coin Offering violated state regulations. The Department issued Cease and Desist Orders against those firms.

Last week, we wrote about the ICOs ban in South Korea and the EU regulations for ICO. Now, we found out, that in North Dakota authorities banned a few startups’ ICO.

A Cease and Desist Order is a document sent to a company to stop an illegal activity (cease) and not to restart it (desist). If the firm does not terminate its venture by a deadline set in the letter, the business can be sued. The C&D order is kind of a warning.

Stop promoting ICOs

Karen Tyler, North Dakota Securities Commissioner, has issued Cease and Desist Orders against 3 companies promoting Initial Coin Offering in the state. According to the statement, the securities are unregistered and potentially fraudulent.
The Order came after the NDSD’s ICO Task Force conducted investigations on Crystal Token, Advertiza Holdings (Pty) Ltd., and Life Cross Coin aka LifecrosscoinGmbH. The investigators found out that the accused companies’ product includes unrealistic promises, which could turn into harmful investment. Tyler said:

The continued exploitation of the cryptocurrency ecosystem by financial criminals is a significant threat to investors. Financial criminals are cashing in on the hype and excitement around blockchain, crypto assets, and ICOs – investors should be exceedingly cautious when considering a related investment”.

What token can they offer

Crystal Token (CYL) is ERC 20 token on the Ethereum blockchain technology. The company brands its product as “evolutionary multi-utility token”. According to the firm’s website, investors can earn daily up to 2%. The shares are paid in another token known as VCYL, also issued by Crystal Token. The company is not registered to sell securities in North Dakota. The website of the issuer contains statements with exorbitant rates of return on investment. So far, Crystal Token hasn’t provided any shreds of evidence of such claims. Also, there aren’t any identities of management. According to the website, the project has almost 30K members.

Advertiza Holdings (Pty) Ltd. gathers their investors through the website. The company offers Tizacoin or TIZA, virtual currency focused on digital advertising. On the site, statements point out that TIZA isn’t an utility, but a security token (you can find the difference here). Advertiza Holdings claims that the token went through the SEC regulations. There’s no evidence to back that claim.

Life Cross Coin also operates on the website. The IP address comes from Berlin and contains ransomware, trojans and identity thefts. The coin is called LICO. According to the company, the currency will be used for donation and supporting charities. The website provides a full set of false claims and misrepresentations including the people represented to be the executive team, who all appear to have fake names.

Tyler said that the latest actions were part of Operation Cryptosweep, a multi-jurisdiction investigation and enforcement effort involving over 40 U.S. and Canadian securities regulators.

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