Jefferson City, MO — Missouri Secretary of State Jay Ashcroft’s Securities Division today announced it has initiated an administrative enforcement action against the Baltic Fund, of Vilnius, Lithuania as part of an international crackdown on fraudulent Initial Coin Offerings (ICOs) and cryptocurrency-related investment products. The sweep is coordinated by the North American Securities Administrators Association (NASAA), of which the securities division is a member.
As part of “Operation Cryptosweep,” the securities issued a Cease and Desist Order and Order to Show Cause against the Baltic Fund based upon multiple alleged violations of the Missouri Securities laws.
“Fraudulent activity involving ICOs and cryptocurrency-related investment products is a significant threat to Main Street investors in Missouri,” Commissioner David Minnick said. “Cryptocriminals need to know that we are committed to swiftly and effectively protecting investors from schemes and scams involving these products.”
The division has joined with more than 40 other state and provincial securities regulators in the United States and Canada in “Operation Cryptosweep,” resulting in nearly 70 investigations and 25 completed or pending enforcement actions since the beginning of the month. These actions are in addition to more than a dozen enforcement actions previously undertaken by NASAA members regarding these types of products.
In April 2018, NASAA organized a task force of its member state and provincial securities regulators to begin a coordinated series of investigations into ICOs and cryptocurrency-related investment products. Regulators identified many cryptocurrency-related products and as part of its work, the task force identified hundreds of ICOs in the final stages of preparation before being launched to the public. These pending ICOs were advertised and listed on ICO aggregation sites to attract investor interest. Many have been examined and some were determined to warrant further investigation. A number of these investigations are ongoing and others resulted in enforcement actions announced today.
“The actions announced today are just the tip of the iceberg,” Minnick said, noting that NASAA’s task force also found approximately 30,000 crypto-related domain name registrations, the vast majority of which appeared in 2017 and 2018.
A critical component of “Operation Cryptosweep” is raising public awareness of the risks associated with ICOs and cryptocurrency-related investment products. “Not every ICO or cryptocurrency-related investment is fraudulent, but we urge investors to approach any initial coin offering or cryptocurrency-related investment product with extreme caution,” Minnick said.
For more information about ICOs and cryptocurrencies, contact the agency at 800-721-7996.
SOURCE: news provided by SOS.MO.GOV