New Jersey Issues Stop Orders Against ICOs In the State

The New Jersey Bureau of Securities has issued issued stop orders against two ICOs based in the state. American and Canadian regulators, operating under the North American Securities Administration Association, issued the order which was executed by officials in New Jersey. The stop orders targeted the Unocall and Zoptax ICOs. The orders were issued as part of “Operation Cryptosweep” – an international crackdown on illegal and fraudulent crypto-investment schemes.

Unregistered Sales of Securities

According to officials in NJ, both ICOs were fraudulent.

The Zoptax ICO had a targeted soft cap of $500,000 and a hard cap of $3.4 million through the sale of Zoptax Coins. Meanwhile, those who participated in the Unocall ICO were promised they would be able to take part in the company’s staking program, which was offering daily interests of 0.18% to 0.88%. In both cases, the Bureau charged the offerings with not registering the securities and providing materially false and misleading statements and omitting important information, such as identity of backers, in connection to the offer and sale of securities.

The NJ Attorney General said that the rules apply for all businesses regardless of the medium on which they existed. In a statement, the AG said the Bureau of Securities was ready to enforce protection laws for investors for all ICOs and crypto investments in the state. The AG urged all participants to note that as the crypto market was evolving, the rules would still apply to them.

“With the price of Bitcoin increasing over the last few months and the announcement of Facebook’s Libra, there has been a sharp increase in public solicitations to invest in crypto-related products that appear on their face to be suspect,” said Bureau Chief Christopher Gerold. “The two actions today are a reminder to investors that investing in cryptocurrencies or crypto-related products have significant risks and investors must do their diligence before investing.”

The Cryptosweep operation is a joint effort by authorities in Canada and the US and had 200 active investigations, as of August 2018. Since January 2019, the Cryptosweep operation has 85 complete or pending cases. There are also 330 investigation or inquiries going on and 8 enforcement actions, which include these two ICOs.

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