At least four new ICO projects received cease-and-desist orders from the Colorado Division of Securities on Nov 20. The startups are alleged to have involved itself in ‘fraudulent and illicit practices’ and as such are not worthy of receiving investments from the public.
The crypto and blockchain related companies ordered to shut down are Credits LLC, Crowdshare Mining, Global Pay Net and CyberSmart Coin Invest. These projects were discovered by the ICO Division of the Colorado Securities Commision according to the public document.
Colorado Securities Commissioner Gerald Rome who issued the order goes ahead to point out that some of the ICOs are using fraudulent marketing tactics while the others are violating the State’s securities law.
For instance, the ICO Global Pay Net issues GLPN Coins which it claims give an investor a share in their business. To make their offer even more attractive, they promise investors an “80% return” from company profits.
Another of them CrowdShare Mining issues CSM tokens to investors and promise a 1000% profit after four years. The firm also claims they will use renewable energy sources to mine cryptocurrencies and pay investors 50% in dividends.
Commissioner Rome once again urged investor to be more careful with the ICOs they invest in since a sizeable number of them are just designed to “trick investors into wrongfully paying them.”
More Cease-and-Desist Orders
As per the order, the Colorado Securities Commission has already issued 18 cease-and-desist orders against fraudulent ICOs that are accessible to the State’s residents. These orders have come between May 2018 and now while two are still pending.
The Commision described this as a “red flag” that there is a ‘real risk’ in putting money into ICOs even though they seem legitimate.
Earlier this month, the commission also issued similar orders to four other startups, Bitcoin Investments, PinkDate, Prisma and Clear Shop Vision.
Across the U.S, we also reported another cease-and-desist order in North Dakota issued to an ICO who allegedly impersonated a Lichenstein based commercial bank by issue a token that resembles that which the bank wants to release in the future.