North Dakota Securities Watchdog Issues Cease And Desist Orders Against Three ICOs

ICO News, News, Regulation | October 15, 2018 By:

Karen Tyler, North Dakota Securities Commissioner, has issued cease and desist orders against three initial coin offerings (ICO) for allegedly operating illegally in the state.

The commissioner’s orders were issued after the Department’s ICO Task Force conducted an investigation to identify ICOs and cryptocurrency related investments that pose risks to North Dakota investors. Following the investigation, three ICO projects were found to be promoting “unregistered and potentially fraudulent securities in North Dakota.” These include Crystal Token (CYL), Advertiza Holdings Ltd., and Life Cross Coin.

Crystal Token claims to be an “evolutionary multi-utility” ERC-20 token that will provide investors with earnings up to two percent per day. In addition to not being registered to offer securities in the state, the regulator said that Crystal Token’s website contains fraudulent statements with claims of excessive unsubstantiated rates of return on investment. The website also fails to provide sufficient disclosure of the management team’s credentials, and purposely withholds their identities.

Advertiza Holdings is offering “Tizacoin” (TIZA), which “allows investment into the company focusing on digital advertising.” It claims that Tizacoin holders can expect to make a profit from the appreciation of the value of the tokens. The order sates that Advertiza falsely claims to be registered with the US Securities and Exchange Commission (SEC) and is also not registered to sell securities in North Dakota.

Life Cross Coin has a website registered in Berlin and the IP address used is associated with ransomware, trojans, and identity fraud. The firm claims that its LICO token is used for the donation and support of charitable organizations. According to the North Dakota Securities Department, the company is not registered in North Dakota to offer securities, and their website contains unsubstantiated claims and misrepresentations.

Tyler said that the continued exploitation of the crypto ecosystem by financial criminals is a significant threat to Main Street investors.

“In formulaic fashion, 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 said.