State regulators launch ‘Operation Crypto-Sweep’ to police cryptocurrency investment schemes

Regulators in the U.S. and Canada are launching a widespread crackdown on some cryptocurrency investment schemes, members of the North American Securities Administrators Association said Monday.

More than 40 state and provincial watchdogs are participating in “Operation Crypto-Sweep,” which has triggered at least 70 investigations so far. The coordinated effort, first reported by The Washington Post, focuses on a cryptocurrency fundraising process known as initial coin offerings, as well as other “investment schemes.”

“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 in May, Texas regulators sent a warning letter to U.K.- based BTCrush saying it was violating securities laws and misleading investors through its marketing. The company published videos showing the interior and workings of what it said was three fully operating mining farms. State regulators said the videos were actually sourced from publicly available stock footage.

The Texas regulator also took action against Wind Wide Coin, which used pictures of celebrities including Jennifer Aniston and Prince Charles to advertise its cryptocurrency.

“Promoters also know that anyone can be anyone and say anything about anything on the internet,” Rotunda said…

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