On August 7th, the New Jersey Bureau of Securities (The Bureau) issued multiple ‘Cease and Desist’ orders, on behalf of themselves and the North American Securities Administrators Association (NASAA).
These actions took place as part of an effort dubbed by the regulatory bodies as ‘Operation Cryptosweep’. The companies which were on the receiving end of these orders were a pairing of New Jersey based outfits – Zoptax and UNOcall.
The pairing are accused of issuing fraudulent digital securities under the guise of utility tokens through an ICO.
This company indicated that they utilize a decentralized network to facilitate private voice-over-internet-protocol (VOIP) calls.
Their accompanying ICO was originally expected to raise upwards of $3.4 million USD. The Bureau indicates that, not only do the tokens meet the framework of a security, but they were not registered with authorities. Furthermore, the company was found to make various misleading statements on their website.
CEO and Founder, Rao Naveed, oversees company operations.
UNOcall touts their product as a ‘secure coin and payment platform’, based on blockchain technologies.
Much like Zoptax, UNOcall was found to be displaying misleading statements on their site, containing guarantees on investment returns. This ICO and accompanying tokens were also not registered with authorities.
Founder, Oggan Sarfuddin, oversees company operations.
Upon announcing the distribution of multiple cease and desist orders, Acting Director of the Division of Consumer Affairs of the New Jersey Bureau of Securities, Paul R. Rodriguez, took the opportunity to warn investors. He stated,
“The Bureau’s actions today, and the actions taken by other securities regulators during ‘Operation Cryptosweep,’ are a reminder to investors that while not every initial coin offering or cryptocurrency-related investment is fraudulent, there are significant risks…