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U.S. and Canadian state securities regulators have initiated dozens of investigations into cryptocurrency scams. 40 Securities agencies from U.S and Canada launched their checkups on existing and future ICO’s in order to fight fraud. Implementation measures earned its code name “Operation Cryptosweep”, announced today at NASAA's FinTech Forum for Securities Regulation Daily. Since April, state regulators have launched 70 investigations and managed to proceed in 35 of them.

Special attention was paid to the unregistered securities offerings and ICO’s that promise significant returns without informing investors of the risks. “Operation Cryptosweep” already has categorized how potentially fraudulent ICO’s may look like to draw attention to them. Among the telltales are companies claiming guaranteed returns, celebrity endorsements and a sophisticated but almost empty “white paper” outlining the investment strategy.

The SEC recently even created a fake website advertising an imaginary ICO, “” to educate potential investors against fraud. “Buy Coins Now” button of this site was redirecting people to an educational site to warn potential raud victims.

According to Joe Rotunda, Director of Enforcement for the Texas State Securities Board, crypto fraudsters are “manipulating photographs, media, testimonials and other online information to deceive the public into believing their claims” about huge returns.

Regulators are also seeking out help from people by urging them to report any scams they encounter.

This initiative by state regulators are parallel actions to the SEC’s and CFTC’s expanding interest into cryptocurrencies.

“The actions we’ve taken to date are just the tip of the iceberg...You’re going to see in this space a lot more collaboration and cooperation going forward,” said NASAA president and director of the Alabama Securities Commission.

By Nadya Astam

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