U.S., Canada Regulators Launch Crackdown on Crypto Fraud

Governments, regulators, and researchers are finally bringing to the light some of the less talked about issues in crypto space thanks to recent developments such as the Chinese study that unearthed the fact that there had been 421 token sales. This is a pretty huge number and in light of many other scandals of a similar kind and magnitude within the same space, regulators in Canada and the United States have recently launched a crackdown on fraudulent Initial Coin Offerings (ICOs).

The crackdown operation that was dubbed “Operation Cryptosweep” by the North American Securities Administrators Association (NASAA) involved a series of coordinated enforcement actions by state and provincial securities that were intended to clamp down on fraudulent cryptocurrency related investments as well as the entities that were backing them. Among the participants of this operation were regulatory entities from over 40 jurisdictions across North America. So far, Operation Cryptosweep has yielded about 70 inquiries and investigations alongside 35 enforcement actions that have either been completed or are pending.

 “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,” said Joseph Borg, NASAA President and Director of the Alabama Securities Commission. “The persistently expanding exploitation of the crypto ecosystem by fraudsters is a significant threat to Main Street investors in the United States and Canada, and NASAA members are committed to combating this threat. Despite a series of public warnings from securities regulators at all levels of government, crypto criminals need to know that state and provincial securities regulators are taking swift and effective action to protect investors from their schemes and scams.”

In addition to participating in NASAA’s efforts, the state and provincial regulators will be collaborating with the Securities and Exchange Commission and the Commodity Futures Trading Commission to ensure that the organization’s goals of providing a safe crypto space are met.

Praise from All the Right Places

NASAA’s efforts have been lauded by a number of stakeholders operating in or in association with the cryptocurrency space – these include traders, crypto experts, and even members of the mainstream financial industry. Among the most notable supporters of NASAA’s initiative is Jay Clayton, the United States Securities Exchange Commission (SEC) chairman, who went as far as releasing a statement expressing his delight in NASAA’s execution of the crackdown.

“I applaud our fellow regulators in the United States and Canada who are coordinating and participating in efforts to police fraud in the Initial Coin Offering (ICO) markets. These state and provincial regulators play a critical role in protecting Main Street investors.” Clayton said in the statement. “The enforcement actions being announced by NASAA should be a strong warning to would-be fraudsters in this space that many sets of eyes are watching, and that regulators are coordinating on an international level to take strong actions to deter and stop fraud.”

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