The U.S. state of North Dakota has issued a cease and desist order against a cryptocurrency operation imitating a fully licensed bank in Liechtenstein. This operation goes by the same name as the token announced by the bank. Its website mirrors the bank’s website and its crypto announcement was identical to the bank’s, including a plan to issue a Swiss franc-backed stablecoin.
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Spoofing Bank’s Announcement
North Dakota’s securities regulator elaborated:
The Union Bank Payment Coin solicitation appears to be an attempt to fraudulently acquire funds through the exploitation of an announcement made by Union Bank AG, a fully licensed and regulated bank based in Liechtenstein.
According to the securities department, Union Bank Payment Coin stated that it is seeking to become the “world’s first security token backed by a fully licensed bank.” In addition to claiming that the coin is a “security token offering,” the company represents that it is issuing a “stable coin that is fully backed by a fiat currency – the Swiss franc,” the regulator detailed.
The commissioner’s order also noted that Union Bank Payment Coin’s website has “instructions on how to invest by purchasing the tokens, which mandates that investors buy the tokens” with BTC or ETH prior to filling out an online registration form.
Ongoing Crackdown
The effort is part of Operation Cryptosweep, a coordinated multi-jurisdiction investigation and enforcement effort involving over 40 U.S. and Canadian securities regulators. It has been investigating more than 200 crypto-related cases.
The securities department also outlined some common red flags of fraudulent ICOs such as “plagiarized white papers containing spelling and translation errors.” They may also comprise “fictitious executive teams represented by stock internet photos, fake business addresses and phone numbers, [and] fake celebrity endorsements.” Promises such as “no risk and high returns” and “false claims about securities law compliance” are also prevalent.
In September, the department issued cease and desist orders against three companies for promoting unregistered ICOs in the state, followed by three more in October.
What do you think of this ICO pretending to be related to a bank? Let us know in the comments section below.
Images courtesy of Shutterstock, North Dakota Securities Department, and Union Bank AG.
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