NASAA’s Operation Cryptosweep Expands To Over 200 Investigations


The North American Securities Administrators Association (NASAA), the trade body for securities regulators in North America has said that there are more than 200 active investigations into initial coin offerings and other cryptocurrency-related investment products.

The regulatory entity which has oversight of the US, Canada, and Mexico, said that the co-ordinated initiative called Operation Cryptosweep had also resulted in 47 enforcement actions since it was launched in May 2018. Infractions found to date vary from securities scam to startups failing to properly register their products prior to offering access to investors.

“State and provincial securities regulators are committing significant regulatory resources to protect investors from financial harm involving fraudulent ICOs and cryptocurrency-related investment products and also are raising awareness among industry participants of their regulatory responsibilities,” said NASAA President and Alabama Securities Commission Director Joseph P. Borg.

Borg warned crypto investors to conduct their own investigation preceding purchasing any tokens, remarking that any promoters “who claim their ICO offering is exempt from securities registration but do not ask about your income, net worth or level of investing sophistication” should be treated with caution. He also requested the crypto ecosystem to be more proactive by suggesting that a strong culture of compliance should be in place before, not after, these products are marketed to investors.

Notably, data from Satis Group this March showed that around 81 percent of ICOs in the first quarter of 2018 were scams, while 6 percent failed. Now, both EU and US regulators have said that in instances where an ICO qualifies as a financial instrument, businesses would need to comply with existing financial regulations.

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