íàçâàíèå

Alabama Securities Watchdog Hits 3 ICOs with Cease-and-Desists

Alabama Securities Watchdog Hits 3 ICOs with Cease-and-Desists

The Alabama Securities Commission (ASC), the U.S. state's securities regulator, has joined its counterparts in Texas and New Jersey in hitting out at initial coin offerings (ICOs) that are soliciting local residents.

According to a cease-and-desist order entered on May 2 and revealed yesterday, the agency has ordered purported cryptocurrency mining firm Extrabit to cease its token sale offering in the state.

The ASC alleged the firm has been illegally soliciting Alabama investors with what it considers an unregistered securities offering after it advertised its token sale on the website of WSFA, an NBC-affiliated TV station licensed in the state capital, Montgomery.

While currently the online ad appears to have been taken down, the agency said in the order that the firm originally claimed that investors in the pre-ICO phase could purchase Extrabit's token "EXB" at half price.

"To participate in the pre-sale, the user must invest $20,000 and after the purchase, the tokens will be sent to MyEtherWallet within 48 hours," the agency quoted the original ad as saying.

Further, Extrabit's white paper claims that, since the firm generates its profits mainly from mining bitcoin, zcash and monero, it promises a 185 percent return on investment every quarter for investors who maintain a positive balance in their EXB wallet.

As well as offering unregistered securities, the ASC said the project made "materially misleading" statements to defraud or deceive investors.

And Extrabit seems not to be the only token project that is targeting residents in Alabama. A Google search for "token sale" on the WSFA website currently comes up with over 200 press release-style ads from various ICO projects.

Furthermore, the ASC has also tackled two other token sale projects, named LEV and Platinum, with cease-and-desist orders entered on May 2 and May 18, respectively.

Like with Extrabit, the agency accused the two projects of selling unregistered securities in Alabama while making unrealistic promises to potential investors over the likely returns on investment.

The ASC actions also follow its counterparts in other U.S. states such as Texas and New Jersey that have recently stepped up their efforts in scrutinizing and red-lighting cryptocurrency projects that are soliciting investments locally.

 Alabama map image via Shutterstock

25.05.2018 / 02:25 99
Jennifer Aniston, Prince Charles Falsely Used to Promote Crypto Scam Jennifer Aniston, Prince Charles
Texas' securities watchdog has issued an emergency cease-and-desist order to a purported cryptocurrency investment scheme that it says tried to dupe
Crypto Investment Schemes Hit With Cease-and-Desists in Texas Crypto Investment Schemes Hit With
The Texas State Securities Board (TSSB) has issued cease-and-desist orders to two bitcoin investment schemes that it alleges are selling unregistered
Massachusetts Regulators Issue Cease and Desist Orders Against Five Firms Offering ICOs Massachusetts Regulators Issue Cease
The Secretary of the Commonwealth of Massachusetts Securities Division has stopped five firms — Mattervest, Pink Ribbon, Across Platforms, Sparkco,
Crypto Miner Genesis Hit With Cease-and-Desist Order Crypto Miner Genesis Hit With
Cloud mining service Genesis Mining has been ordered to stop operating in the state of South Carolina, according to a cease-and-desist order released
South Carolina Wants To Ban Genesis Mining Over Unregistered Securities South Carolina Wants To Ban Genesis
Genesis Mining is facing a cease and desist order from South Carolina, which considers its mining contracts were offered illegally. Lawmakers in
New Jersey Issues Cease-and-Desist to ICO Endorsed by Steven Seagal New Jersey Issues Cease-and-Desist to
The U.S. state of New Jersey has issued a cease-and-desist order to an initial coin offering (ICO) endorsed by film actor Steven Seagal. In an order
Comments (0)
Add a comment
Comment on