An attempt to resurrect the dead ICOs has just failed, given the fact Initial Coin Offerings were classified as fraudulent by official financial regulators in the United States and many other states around the world.
August 08, 2019 | AtoZ Markets - Today, the Bureau of Securities in New Jersey has issued two orders, media outlets described as “emergency”, to stop both, Zoptax and Unocall, from proceeding with their initial coin offerings (ICOs), justifying the orders that token offerings qualify as fraudulent unregistered securities offerings.
On Aug. 7, the Office of Attorney General in New Jersey said in its statement that Zoptax was using a website-conducted ICO to offer its Zoptax Coins, claiming that the ICO has a soft cap of $500,000, as well as a hard cap goal of $3.4 million.
Detailing further reasons behind the decision, the Bureau of Securities sees that Zoptax made “materially false and misleading statements and/or omitting to state material facts in connection with the offer and sale of its securities.”
The lack of information referred to as “misleading”, was attributed to the lack of information about the allocation of ICO funds, pertinent information on the entities behind Zoptax, in addition to information related to the location details such as the company’s physical address and principal place of business.
In parallel, Unocall received the same decision, being said to have misled its prospective investors the same way its counterpart Zoptax did. Unocall claimed in its ICO marketing that its Staking Programme provides guaranteed interest of 0.18% to 0.88% per day.
Allegedly, Unocall is carrying out its ICO in order to raise funds for developing its ecosystem that gives the company the opportunity of for trading its native tokens, altcoins and fiat money through the company’s UNOpay Mobile Wallet.
More security needed to confront scam campaigns
2018 witnessed heated cases as for ICOs, most of which proved to be scam, amid many news that were published about lawsuits against ICOs operatives, the thing that lead to the death of the aforementioned business.
Back to today’s cease decision of those two ICOs, per the Chief of the Bureau Christopher Gerold, the ongoing controversy regarding the Facebook Libra Coin, along with the price of Bitcoin (BTC) formed a hard front against digital assets and pertinent trading, the thing that pushed regulators to toughen their grips over the industry even more.
“With the price of Bitcoin increasing over the last few months and the announcement of Facebook’s Libra, there has been a sharp increase in public solicitations to invest in crypto-related products that appear on their face to be suspect [...] The two actions today are a reminder to investors that investing in cryptocurrencies or crypto-related products have significant risks and investors must do their diligence before investing.” Said Gerold.
Media reports pointed out that both the two cease warrants to the firms referred to above, come as part of the ongoing Operation Cryptosweep, which the Bureau’s statement referred to as “an international crackdown on fraudulent Initial Coin Offerings (“ICOs”) and crypto currency-related investment schemes” launched by the The North American Securities Administrators Association (NASAA) in April 2018.