NASAA cracks down on over 200 ICOs in US cryptocurrency investigation

The North American Securities Administrative Administration (NASAA) announced that over 200 active investigations of ICOs and other crypto-related investment products are ongoing, in a bid to regulate the industry.

The U.S. has stepped up its efforts in cracking down Initial Coin Offerings at a time when they have hit record levels. According to the report published by NASAA, the crackdown dubbed “Operation Cryptosweep” has seen over 200 investigations into ICOs and other crypto-related investment products being carried out.

In a coordinated effort by provincial officials and the state, the task force mandated to oversee the operation has targeted fraudulent ICOs and those that could be violating state and local regulations.

The NASSA president, who’s also the Director of Alabama Securities Commission Joseph P. Borg, talked about how they identified the ICOs in question, stating that it was centred on the projects’ failure to register their crypto-related businesses and products in line with the country’s cryptocurrency laws. He said that:

While not every ICO or cryptocurrency-related investment is a fraud, it is important for individuals and firms selling these products to be mindful that they are not doing so in a vacuum; state and provincial laws or regulations may apply, especially securities laws. Sponsors of these products should seek the advice of knowledgeable legal counsel to ensure they do not run afoul of the law. Furthermore, a strong culture of compliance should be in place before, not after, these products are marketed to investors

Of the 200 investigations, most of the projects were using spurious marketing techniques and fake addresses with unfeasible guaranteed returns in order to lure investors into putting up more money. As of this writing, the operation has seen 46 enforcement actions being issued.

The NASAA was also quick to state that, even registered Crypto businesses and ICOs could still be fraudulent, advising investors to perform due diligence before they invest in any cryptocurrency project.

The end of the ICO craze?

The last two years has seen an unimaginable number of ICOs being set up to seek funds for project development. While many have been genuine and lived up to their word, a good number have turned out to be scams, trying to lure unsuspecting investors into putting in their money before they disappear.

Not being able to determine the real ICOs has made potential investors shy away from investing in various crypto-related projects because of fears they could lose their money.

International crackdown

The recent crackdowns across many countries including China, Philippines, the U.K, South Korea, Japan, and now, the U.S., will go a long way in giving investors confidence that they are investing in worthy projects. If more countries step up their efforts and sweep the sector clean of fraudulent ICOs, then there’s no doubt that sanity will be instilled, and this will mean even more money being poured in.

However, as the ongoing crackdown continues, it’s still critical that investors take caution and responsibility for their investments in order to root out deception.


View posts by James
James is a cryptocurrency enthusiast, an advocate for the development and exposure of blockchain technology, and believes in the use of digital assets for the good of the society. He has been writing about crypto since he first learnt about cryptocurrencies in 2010. Initially, he was attracted by the disruptive economic and social implications of virtual currencies and blockchain technology, and over the years he has dedicated himself to learn everything he can about the industry.

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