Fraudulent activities have become a common element in the sector of virtual currency. There are a lot of cases in which the blockchain technology was used for completely illicit purposes. A lot of such cases have been found from the various parts of the world. Even as regulations are being applied to the section and attempts are being made to update them in a manner so as to suit the requirements, there is a lot that is going wrong. Lately, the regulators from the United States have issued cease and desists orders against three firms as it is believed that they have been offering illegal activities through the means of Initial Coin Offerings.
The three companies against which these orders have been placed are the Crystal token, Advertiza Holdings, Life cross coin. The Crystal Token is a platform that contains the ERC-20 token, however, there is a lot of investment that has taken place on that website that is unaccounted for. This platform claims to provide 2 percent earnings per day. However, it will no longer be allowed to conduct any more business in the state of North Dakota. Advertiza holdings or TIZA are stated to be tokens, however, their features are such that they can be considered securities and not tokens. Moreover, according to the North Dakota Securities Department, it is a false claim that this exchange is registered with Securities and Exchange department, according to North Dakota Securities Department, Advertiza is not registered to sell securities. As for the third firm, Life Cross Coin, this firm had claimed that whatever they had earned would go for charity, however, this firm is not registered as well. Also, its website has been making claims that are fraudulent and entirely false. It is for this reason that the various firms have been ordered to ‘cease and desist’ in their activities.
According to the authorities, such practices hinder the legitimacy that would have otherwise been a part of the digital currency sector. It acts as an obstacle for those who are interested in maintaining the integrity of the sector. Moreover, those conducting the illegal activities encash on the popularity of the sector. The regulators have therefore told the investors to be more careful about what they choose to invest in.
The orders that have been given recently are an integral part of the initiative by the country called “Operation Jurisdiction”, this initiative looks into abating the actions of those firms that are involved in the illegal activities. Something similar is happening in California, it has also opened an investigation on two of its companies for promoting those ICOs that are involved in illegal activities.