(TNS) – North Dakota has issued an order to terminate and suspend a company that claims to offer cryptocurrency security services.
State Securities Commissioner Karen Tyler announced the order Monday against Union Bank Payment Coin (UBPC), accusing the company of "promoting unregistered and potentially fraudulent securities in North Dakota in the form of an offer" Initial Coins (ICO), a method of financing used by startups To raise funds, according to a press release, companies create virtual coins or tokens to sell online to investors via ICO in exchange for encrypted or fiat currency, the statement said.
"Because ICOs are sold on the Internet and spread heavily through social media platforms, North Dakotans can be exposed to offers whether the promoter is on the street or across the globe," Tyler said in a note. "Financial criminals continue to collect the hype and excitement around blockchains, cryptographic assets and ICOs: Investors should be extremely cautious about considering a related investment."
UBPC has declared that it wants to become the "first security token in the world supported by a fully licensed bank", but the North Dakota Securities Department claims that the company is attempting to acquire funds fraudulently by exploiting an announcement by Union Bank AG, a bank in the European country of Liechtenstein.
"The website (UBPC) also indicates that the Union Bank Payment Coin … is a" security token offering "that is invested as an instrument or mechanism" designed to store wealth using digital assets that generate income ", said the statement. "The company also represents that it is issuing a" stable currency that is fully backed by a fiat currency – the Swiss franc ". "
The order came after the state established an ICO Task Force through Tyler's office in an attempt to identify cryptocurrency investments that pose a risk to North Dakota, the statement said. It is also part of the Cryptosweep Operation, a multi-jurisdiction investigation that includes agencies of 40 US and Canadian securities regulatory agencies.
Cryptocurrency is a digital resource that can be used to exchange goods over the Internet.
This is not the first order issued by the state against a company that offers cryptocurrency services. The Securities department issued similar orders in October against Crystal Token, Advertiza Holdings (Pty) and Life Cross Coin, also known as LifecrosscoinGmbH.
© 2018 Grand Forks Herald (Grand Forks, N.D.). Distributed by Tribune Content Agency, LLC.