June 05, 2018
"Operation Cryptosweep" Helping Protect Investors
The Vermont Department of Financial Regulation has issued a cease and desist order to LevelNet (http://www.dfr.vermont.gov/reg-bul-ord/levelnet), of Irving, California, for violations related to the Vermont Uniform Securities Act.
LevelNet is conducting an Initial Coin Offering (ICO) seeking to raise money from investors across the country in exchange for their newly created cryptocurrency. The department's investigation determined LevelNet is violating Vermont law by deceptively advertising unfounded and unrealistic investment returns and failing to properly register the investment. The department ordered LevelNet to immediately stop advertising and selling in Vermont.
This investigation was part of the North American Securities Administrators Association (NASAA) coordinated series of enforcement actions by state regulators to crack down on fraudulent cryptocurrency-related investment schemes.
"The rapid rise of Bitcoin has made Main Street investors aware and interested in cryptocurrencies and ICOs," said Commissioner Michael Pieciak "although many are legitimate offerings that are fully compliant with law - many are not - and this order serves as a good reminder to exercise caution when considering investing in these products."
The department previously issued a cryptocurrency investor alert (http://www.dfr.vermont.gov/press-release/vermonters-should-exercise-caution-cryptocurrencies) warning Vermonters about promises of exaggerated profits and that many fraudulent investment schemes involve unlicensed individuals or unregistered investments. Vermonters can contact the department at 802-828-3420 or email@example.com for help determining whether those selling or advising investments are properly registered.
NASAA members from more than 40 jurisdictions throughout North America, including Vermont, participated in "Operation Cryptosweep," which to date has resulted in nearly 70 inquiries and investigations and 35 pending or completed enforcement actions related to ICOs or cryptocurrencies since the beginning of May. The department's investigation was conducted by Emily Kisicki, director of enforcement and examinations; Karla Nuissl, assistant general counsel; and overseen by William Carrigan, deputy commissioner of securities.
Media Contact: Stephanie Brackin, Information Management Officer, 802-828-4872, firstname.lastname@example.org
Source: Department of Financial Regulation
Last Updated at: June 05, 2018 14:36:42