DENVER—Colorado’s Division of Securities has issued a cessation order to four cryptocurrency firms for issuing unregistered securities through Initial Coin Offerings (ICO).
So far, the state’s Securities Commissioner has issued cease and desist orders to 12 ICOs for the same offense, Ethereum World News reported.
The State’s Division of Regulatory Agencies (DORA) instituted an “ICO Task Force” in May to probe possible fraudulent projects aimed at cryptocurrency investors. These recent orders issued to Bitcoin Investments, Prisma, PinkDate, and Clear Shop Vision are based on the findings of the ICO Task Force, Ethereum World News said.
The four firms are allegedly offering unregistered securities to citizens of the state, Ethereum World News reported.
The Allegations
The Division alleges that the companies offer an unrealistic return on investments ranging from 27% to 95%. Through their separate ICOs namely DB Token ICO (Bitcoin Investments, Ltd.), PinkDate ICO, Prismacoin, and ORC Token (Clear Shop Vision Ltd.), these companies solicited investment from Colorado citizens despite not being registered with the State’s Division of Security, Ethereum World News reported.
Bitcoin Investments, Ltd. allegedly offers 1% daily returns on investment. The company also claims that in 2017 investors received an average of 95% return on their registered investments. PinkDate allegedly sought to raise $5 million through the sale of its cryptocurrency. In the case of Prisma, the company purportedly operated an arbitrage and lending platform. Investors had to buy the company’s virtual currency – PrismaCoin to use the platform. The firm promises investors returns of up to 27%, Ethereum World News said.
For Clear Shop Vision, the division claims that the company has issued three unregistered ICOs since June.
On receipt of the orders, the cryptocurrency companies are to immediately stop all operations that violate the state’s Securities Act, including fraud and issuing unregistered securities.