News

Operation Cryptosweep Targets US Crypto Projects En Masse

Pinterest LinkedIn Tumblr

A major anti-crypto operation known as “Operation Cryptosweep” is making some major waves. Organized by the North American Securities Administrators Association, the goal of the project is to target a number of ICO’s and other cryptocurrency companies and projects that are operating in or doing business with the United States. Some of the companies targeted include Binance, Coinbase, and Bittrex just to name a few.

NSAA Operation Cryptosweep

Brooms at the Ready

According to a recent press release, the NASAA currently has “more than 200 active investigations by state and provincial securities regulators”. Since May of this year when the operation began, a total of “46 enforcement actions” have already taken place. The publicly available statistics of operation crypto sweep indicate that the majority of the actions taken come in the form of cease & desist orders, and various types of information demand letters.

The majority of the cease & desist letters (which can be viewed freely on the NASAA website) tend to be state specific. In simple terms, the letters will demand that one particular company stop doing business with one specific US state. For example, an Ethereum project called Bionic Coin received a cease & desist letter forbidding them from doing business with the state of Indiana.

Bionic Coin is a fairly typical ICO for Ethereum-based tokens. The project states that its aim is to be used for the purchase of electronics and computer goods.

Another company that was targeted is Chain Group Escrow Service, which is now forbidden from doing business in the state of Alabama. It’s important to note that these cease & desist letters do not apply at the federal level, and so these companies can continue to operate and transact with customers based in other US states.

Taking Care of Bad Guys

While Operation Cryptosweep is arguably an attempt to strong-arm crypto startups into oblivion, the project does seem to be taking down at least a few potential bad actors.

One company in particular that uses the name BTCrush claimed to be selling cryptocurrency cloud mining services and promising 4.1% daily profit rates. If you start to hear Carlos Matos shouting “BitConnect!” At the top of his lungs, then we won’t feel too surprised. That’s because any company that promises a return like that is undoubtedly a Ponzi scheme or scam. The site for BTC rush is currently off-line.

BitConnect Ponzi Scheme

Read also: Bitconnect – Is It A Ponzi Scheme?

According to the emergency cease and desist order which came from Texas State securities board, the owners of the company are all based in either London or Panama.

Coinbase and Other Big Players Targeted

One final group that was targeted with at least some form of action include some of the best-known and best trusted names in crypto including Coinbase, Cracken, Gemini, bit flyer, and others.

The letter they received from the Attorney General of New York State asks that these companies provide them with 34-points of information, such as information about who owns the company, the operations of the company and the fees they charge, trading policies, how they deal with service outages and other “suspensions of trading”, internal controls, privacy and anti-money laundering policies, and so on.

It appears that this is largely a voluntary information request and does not a cease-and-desist or other court order.

Final Thoughts

It’s difficult to assess whether operations like Cryptosweep are harmful or benign to cryptocurrency. With seemingly harmless ICO’s being targeted alongside serious Ponzi schemes, it makes it even more difficult to ascertain what the goal of the project is.

Regardless of the motives, initiatives like these will likely act to only stifle or slow the growth of cryptocurrency adoption within the United States. Thankfully, the number of actions Operation Cryptosweep has produced is quite minimal. Of the thousands of ICO’s that were held in 2017 and 2018, it seems that only a small handful of them received very specific and geographically contained restriction orders.

It’s almost certain that this will lead to more American or US focused cryptocurrency companies to walk with an even lighter step from here on out.



Avatar
Author

Robert is News Editor at Blockonomi. A true believer in the freedom, privacy, and independence of the future digital economy, he has been involved in the cryptocurrency scene for years. Contact Robert@blockonomi.com

Write A Comment

Blockfi
As Featured In
As Featured In