New Jersey Halts Two ICOs for Selling Unregistered Securities

The New Jersey Bureau of Securities on Wednesday issued emergency stops to two initial coin offerings (ICO) for selling unregistered securities. The companies in question are Zoptax and Unocall.

According to the official announcement, Zoptax has been selling tokens - Zoptax Coin - which fall under the category of securities. The company aimed to raise up to $3.4 million, with the soft cap set at $500,000.

Similar to Zoptax, the Bureau also charged Unocall for selling unregistered securities through a digitized token sale and investment offer for its "Staking Staking Staking is defined as the process of holding funds in a cryptocurrency wallet to support the operations of a blockchain network. In particular, staking represents a bid to secure a volume of crypto to receive rewards. In most case however, this process relies on users participating in blockchain-related activities via a personal crypto wallet.The concept of staking is also closely tied to the Proof-of-Stake (PoS). PoS is a type of consensus algorithm in which a blockchain network aims to achieve Staking is defined as the process of holding funds in a cryptocurrency wallet to support the operations of a blockchain network. In particular, staking represents a bid to secure a volume of crypto to receive rewards. In most case however, this process relies on users participating in blockchain-related activities via a personal crypto wallet.The concept of staking is also closely tied to the Proof-of-Stake (PoS). PoS is a type of consensus algorithm in which a blockchain network aims to achieve Read this Term program." The company also assured investors a return of between 0.18 to 0.88 percent on a daily basis via its staking program.

“Today’s action demonstrates that our Bureau of Securities stands ready to enforce our investor protection laws in cases involving initial coin offerings and cryptocurrency-related investment schemes,” New Jersey Attorney General Gurbir S. Grewal said.

“As innovation in the online cryptocurrency-related investment market continues, market players need to understand that the rules still apply to them.”

The Bureau also charged both companies for making false and misleading statements to investors and not providing mandatory material facts in connection with the offer and sale of its securities, including team information and the physical address of the company.

An operation to bust illegal crypto investments

The cease and desist of both the ICOs were a part of the US agency’s ongoing “Operation Cryptosweep” to cracking down illegal ICOs and fraudulent crypto investment schemes.

Finance Magnates recently reported that the North American Securities Administrators Association (NASAA) is currently investing in more than 130 new crypto-related cases. The agency has also taken enforcement action on 35 cases since the beginning of this year.

Last month, the New Jersey authorities filed a complaint against Pocketinns and its president for raising $400,000 by selling unregistered securities through an ICO.

“The Bureau’s actions today, and the actions taken by other securities regulators during ‘Operation Cryptosweep,’ are a reminder to investors that while not every initial coin offering or cryptocurrency-related investment is fraudulent, there are significant risks involved with these products,” Paul R. Rodríguez, acting director of the division of consumer affairs, added.