The Securities Commissioner in Colorado has sent a cease and desist order to a Healthcare Corporation based in Florida. As a result, this stops the company ICO stating that the token sale is offering an unregistered security. An original order was made back in July, and this order is reinforcing that.
Previous news release stated that the LNDA token advertised that consumers could purchase ‘Linda Health Insurance’ which was obtained through artificial intelligence via Blockchain technology. Unfortunately, those same consumers were never advised of the risks associated with cryptocurrency and that this security could easily be pushed aside and ignored.
Additionally, LNDA says that their offering is much like a crowdfunding campaign but, a judge has determined this is not accurate and resembles more like an investment contract. Which is clearly much different and holds much different liabilities, consequences, and legalities.
The Judge (Norwood), had gone on to say that this scheme is where someone invests in a common enterprise and is led to believe can attain profits from this investment from a promoter and/or third party.
Bottomline, ICO’s Are Risky
They should only be undertaken by experienced investors who have a clear understanding of such. It is encouraged that only those investors approach these ICO’s with the same caution as any high-risk investments. When you invest any monies in cryptocurrency, where you are expecting a return of some sort, you need to be well versed, period.
The cease and desist is likely to stand in the long-term given that any time a consumer or investor pay monies into a ‘fund’, where there is a return expected, is an investment not crowd funding.