Not every Initial Coin Offering is legitimate. The public is aware of this, the authorities are aware of this, and now these ICOs are being taken to task.
Who’s in charge?
Acting as a division of the Department of Regulatory Agencies (DORA), Colorado’s Division of Securities is currently heavily investigating three ICOs.
This committee has become known as an ‘ICO Task Force’. Current Division of Securities commissioner Gerald Rome formed this group in May of 2018. As stated on their website, they were created, “…with the purpose of identifying companies or individuals that might pose a risk to Colorado investors.”
Suspect #1 – Bionic
Pitching their product to citizens of Colorado, Bionic promises riches with minimal effort. Their role, as stated on their website, is to act as an, “incubator for companies using blockchain tech to provide innovative new services and applications…a family of companies who share workspaces, experience and advice…network of professionals who specialize in connecting promising startups to a “chain” of service-providers, advisors, potential investors, legal & accounting affiliates.” The site goes as far as faking partnerships with the likes of Forbes, and promising extravagant returns on investment.
Suspect #2 – SybreLabs
This offering known as SybreLabs is based out of London, England. Despite this, the company continues to market their platform to those that reside in Colorado. SybreLabs is promoting a platform which acts as an automated trading bot that takes part in arbitrage opportunities.
SybreLabs provides potential customers with literature and promotional material regarding their platform. This is intended to help word of their offering spread quickly. This literature is full of tell-tale fraudulent promises such as extravagant returns on investment.
Suspect # 3 – Global Pay Net
The final company being investigated by the task force is Global Pay Net. If any of these three was blatantly a security offering, it would be Global Pay Net. On their site (which has now been taken down), they stated that their native token would directly represent a share in the company as a whole. In addition, investors holding their token would be entitled to dividends.
To further add to the obviousness that this ICO is a fraud is the fake partnerships and filings. Despite being supposedly based out of Washington, there is no company filing in that state. Also, much like Bionic, there are listed partnerships that simply do not exist. It is due to these many reasons that they are being investigated by the task force.
A Day of Reckoning
In response to these three ICO’s the task force has issued ‘signed orders to show cause’ against each. In doing so, they are attempting to prove that these ICOs fit the mold of a security offering, or are outright fraudulent.
While this clampdown does not bode well for the current crop of suspicious ICOs taking place, it will prove to be a boon in future years. Fraudulent companies will do nothing but scare away investors. With divisions like the task force popping up in various governments worldwide, hopefully we can experience a more trustworthy market in the years to come.