The investigation is headed by NASAA (North American Securities Administrators Association) and consists of nearly 70 inquiries and 35 pending or completed enforcement actions since the beginning of the month. Between the fake SEC coin offering launched and Operation Crypto-Sweep, it is evident that regulators are getting serious about cracking down on blatant scams.
The move comes on the heels of a Wall Street Journal analysis of 1,450 cryptocurrency offerings that revealed rampant scams. There were at least 271 initial coin offerings with red flags that include plagiarized investor documents, promises of guaranteed returns, and missing or fake executive teams. Last week, the Securities & Exchange Commission launched a fake ICO website to increase awareness of the typical warning signs of scam ICOs. The mock website HoweyCoins.com represents a classic example of a fraud ICO site that touts an “all too good to be true investment opportunity.”