North Dakota’s Securities Department’s ICO Task Force has issued a cease and desist order against a fraudulent Russian ICO website, which was imitating the Union Bank Payment Coin, a token released by Liechtenstein Union Bank. As per the press release, the order was issued by Karen Tyler, on Monday, November 19th.
The investigation found out that the website was claiming to become the “world’s first security token backed by a fully licensed bank” and also stated that the UBPC is fully backed by the Swiss franc.
The IP address behind the fake ICO was found to be in Russia and was registered to an individual instead of being registered in Leichtenstein. The press release also notes that the fake UBPC website tried to lure investors into paying funds by directly mimicking some of the Union Bank’s identity, like stylized elements, verbiage, leadership information, and images. Tyler further warned U.S. investors about fraudulent ICOs:
“Financial criminals continue to cash in on the hype and excitement around blockchain, crypto assets, and ICOs — investors should be exceedingly cautious when considering a related investment.”
The investigation was conducted under the Operation Cryptosweep, which is a coordinated international investigation into crypto investment programs which have the possibility to be fraudulent, and involves 40 U.S. and Canadian state and provincial securities regulators. The campaign was launched in May, and since have identified about 30,000 crypto-related domain names and conducted over 200 investigations of ICOs by August.North Dakota’s SEC branch recently issued cease and desist orders against three firms, Crystal Token, Advertiza Holdings (Pty) Ltd., and Life Cross Coin a/k/a LifecrosscoinGmbH, for offering unregistered and fraudulent securities in the form of ICOs.
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