Colorado Securities Commissioner has issued a cease order to three cryptocurrency companies accused of offering unregistered digital currency ICOs. The orders resulted from investigations dubbed “Operation Cryptosweep” by Colorado’s Securities ICO Task Force that has been investigating potentially fraudulent ICOs offered to Colorado residents.
According to the press release, the Division of Securities of the Colorado Department of Regulatory Agencies conducted investigations (DORA) which has members on the ICO Task Force convened in May to identify individuals and companies bent on defrauding Colorado investors. The show cause order identified the three companies soliciting Colorado residents Monday, August 28, 2018:
“The companies that received the orders are Bionic Coin, Sybrelabs Ltd. (also known as Cryptoarb), and Global Pay Net (also known as Glpn Coin and Gpn Token). Previous orders were submitted to Bitcoin Investments Ltd. (also doing business as Db Capital), Estatex, Bitconnect Ltd., and Magma Foundation (also doing business as Magma Coin).”
A show cause order is a court order that requires a person or entity to explain, justify or prove something in court. The three companies failed to respond during the hearing on Friday, August 24, 2018. A spokesman for DORA elaborated:
“There likely won’t be another hearing. Given that no respondents showed up, the Division presented the case to an administrative law judge, who must determine within two weeks whether the case made by the Division represents factual evidence.”
The press release by the Colorado Division of Securities provides the following information about the said companies:
Bionic Coin: The Company’s website discusses an ICO dubbed “Bionic” or “BNC” and claims that money raised during the Initial Coin Offering would be used for an application that enables instant payments worldwide but lacks a physical address or any controlling person listed.
Sybrelabs Ltd: The commission accuses the company that’s allegedly headquartered in Cambridgeshire of promoting unregistered security as an investment pool and claims to enable users to access cryptocurrency exchange trading via a “crypto arbitrage robot.”
Global Pay Net: The company claims to be a marketing company for an ICO that’s raising funds to create an application that will become an international Blockchain-based financial platform. While the website names various renowned experts as the team behind it, two of the individuals denied involvement when questioned by investigators.
The authorities have ordered the three companies to close shop immediately and desist from selling their securities to Colorado Residents.