Securities Commissioner of the U.S. state of North Dakota Karen Tyler has issued orders against three companies promoting “unregistered and potentially fraudulent” securities in the state in the form of ICOs.
The investigations were carried out in order to identify cryptocurrency related activities potentially dangerous for North Dakota investors. It is a part of Operation Cryptosweep, an investigation and enforcement effort that involves over 40 U.S. and Canadian securities regulators.
Paul HackleyThe companies affected by the orders are BitConnect, Magma and Pension Rewards. All of them are not registered to offer securities in the state, though their websites are accessible by its residents. The websites contain “unsubstantiated claims,” “misrepresentations,” or “several allegedly fraudulent representations.”
“The expanding exploitation of the cryptocurrency ecosystem by financial criminals is a significant threat to Main Street investors. Financial criminals are cashing in on the hype and excitement around blockchain, crypto assets, and ICOs – investors should be exceedingly cautious when considering a related investment,” Tyler commented.
The Scam Companies
BitConnect, BitConnect LTD, and BitConnect International PLC were already served orders by Colorado, North Carolina and Texas alleging unregistered activity and fraud. The Bitconnect website claims that the holders of their cryptocurrency can receive interest rates of up to 120%. According to the commissioner, the claim is “unsubstantiated and misleading.”
Magma Foundation, Magma Coin, and Magma are conducting an ICO for a token which is allegedly backed by “gold and/or ETFs.” The website contains “allegedly fraudulent content, including images of people represented to be the Magma Foundation executive team, which in fact are not related to Magma and are assigned fake names.” The company was previously issued a Cease and Desist order by the Colorado Securities Division.
Yuri MolchanPension Rewards Platform, aka Pension Rewards, offers to sell a cryptocurrency called “$Pcoin” or “Pcoin,” connected with their platform for freelance work. “The website states that the coins will multiply rapidly and produce a large profit for investors, and that the growth will ‘happen in no time,’” the order details. “Pension Rewards fails to disclose material financial and risk information to potential investors, nor do they describe the means by which they will provide the promised return on investments.”
Arman Shirinyan
Yuri Molchan
Vladislav Sopov
Dan Burgin