US Regulators Carry Out Massive Crackdown on Fraudulent ICOs

May 22, 2018

Financial regulators of the United States and Canada has decided to strike a large-scale blow against fraudulent initial coin offerings, representatives of the North American Association of Securities Administrators (NASAA) said in a statement.

The operation is called "Operation Crypto-Sweep" and more than 40 federal and regional financial watchdogs participate in it. More than 70 investigations have already been launched by the regulators. Fraudulent ICOs are the target of a coordinated blow. 

Director of enforcement at the Texas State Securities Board told The Washington Post:

"Although the international task force's work is far from complete, my suspicions have already been confirmed: The market for cryptocurrency investments is saturated with fraud, and our work is only revealing the tip of the iceberg."

Financial regulator of another US state, Massachusetts, are also involved in the operation, yet they gave more moderate comments.

The Massachusetts Secretary of the Commonwealth William F. Galvin said in a statement: 

"Not every ICO or cryptocurrency-related investment is fraudulent, but we urge investors to approach any initial coin offering or cryptocurrency-related investment product with extreme caution. Fraudulent activity involving ICOs and cryptocurrency-related investment products is a serious threat to Massachusetts investors."

The number of fraudulent cryptocurrency investment schemes has been growing and come to the attention of US federal financial regulators, and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).


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