Regulators warn of cryptocurrency fraud
Dozens of North American securities regulators have joined forces to investigate and warn investors about cryptocurrency-related schemes.
Operation Cryptosweep includes more than 40 regulators in the United States and Canada, including the Ontario Securities Commission, which issued a news release about the investigation Tuesday.
“Operation Cryptosweep contributes to our ongoing efforts to raise awareness about potentially fraudulent activity involving cryptocurrency products,” OSC executive director Leslie Byberg said in a statement.
The project resulted in nearly 70 inquiries and investigations, and 35 pending or completed enforcement actions related to initial coin offerings or cryptocurrencies since the beginning of the month, according to a statement released Monday by the North American Securities Administrators Association.
NASAA members are conducting additional investigations into possibly fraudulent conduct, it said, and those may result in more enforcement actions.
NASAA president Joseph P. Borg called the announced actions “just the tip of the iceberg.”
“The persistently expanding exploitation of the crypto ecosystem by fraudsters is a significant threat to Main Street investors in the United States and Canada,” he said.
“Cryptocriminals need to know that state and provincial securities regulators are taking swift and effective action to protect investors from their schemes and scams.”
A critical component of the operation is raising public awareness about the risks of initial coin offerings and cryptocurrencyrelated investment products.
Investors should always check whether they are dealing with a registered individual or firm and carefully consider risks associated with investing in the novel space, Byberg said.
The provincial securities commission recently warned Ontario investors about five firms — BTCReal, BitSerial, Hypercube Ventures LP, CabinCoin OU and BaapPay Inc. — that appear to be involved in schemes targeting them.
The firms are not registered in Ontario to solicit investments or provide advice on investing in, buying or selling securities, the OSC said, but appear to be encouraging investors in the province to trade or invest in cryptocurrencies.