As crypto scams are getting more common, it seems like regulators have had enough and are getting serious regarding the matter. Security regulators in the U.S and Canada are cracking down against crypto investment scams by launching “Operation Crypto-Sweep”.
The widespread crackdown was announced during an event hosted by the North American Securities Administrators Association (NASAA) on Monday.
According to the Washington Post, this is the largest coordinated cryptocurrency crackdown including more than 40 state and provincial watchdogs. The crackdown is targeted at fraudulent crypto schemes including ICOs as well as “other investment schemes”.
The Operation Crypto-Sweep has triggered “nearly 70 inquiries and investigations and 35 pending or completed enforcement actions since the beginning of the month.”
“Although the international task force’s work is far from complete, my suspicions have already been confirmed: the market for cryptocurrency investments is saturated with fraud, and our work is only revealing the tip of the iceberg,” said Joseph Rotunda, director of enforcement at the Texas State Securities Board.
Earlier this month, Texas regulators sent a warning letter to the U.K –based BTCrush saying it was misleading investors and violating security laws. The company released videos of its three operating mining farms however, regulators later found out that the videos were not real and featured publicly available stock footage.
The Texas regulators also took action against Bitcoin investment platform, Wind Wide Coin that used pictures of famous celebrities to advertise its platform.
“Promoters also know that anyone can be anyone and say anything about anything on the internet,” Rotunda said. “Not surprisingly, they are also manipulating photographs, media, testimonials and other online information to deceive the public into believing their claims.”
U.S regulators including the Securities and Exchange Commission (SEC) and Commodity Futures Trade Commission have gone high alert against crypto scams. Last week, SEC launched a website to spread awareness among investors regarding fake ICOs.
Massachusetts regulator and watchdogs are also participating in this latest move. State’s secretary of commonwealth, William Francis Galvin said that the NASAA task force found some 30,000 crypto domain name registrations, most of which appeared in late 2017, when Bitcoin was at its all-time-high.
“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,” Galvin said. “Fraudulent activity involving ICOs and cryptocurrency-related investment products is a serious threat to Massachusetts investors.”