The Irving, California-based cryptocurrency firm LevelNet has received a Vermont cease and desist order for violations related to the state’s Uniform Securities Act.
Vermont Department of Financial Regulation officials said the 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.
While 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 of Financial Regulation maintains LevelNet is violating Vermont law by deceptively advertising unfounded and unrealistic investment returns and failing to register the investment properly. The department has ordered LevelNet to stop advertising and selling in Vermont immediately.
“The rapid rise of Bitcoin has made Main Street investors aware and interested in cryptocurrencies and ICOs,” Michael Pieciak, Department of Financial Regulation commissioner, said. “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 warning Vermont residents about promises of exaggerated profits and fraudulent investment schemes involving unlicensed individuals or unregistered investments.
Consumers can contact the department at 802-828-3420 or dfr.securitiesinfo@vermont.gov for help determining whether those selling or advising investments are properly registered.