Massachusetts’ top securities regulator has issued a series of consent orders pertaining to five different initial coin offerings (ICO) .
William Galvin, the secretary of the commonwealth in Massachusetts, ordered 18moons, Across Platforms, Mattervest, Pink Ribbon and Sparkco to cease their ICO campaigns Tuesday, following investigations into each of the companies.
The starups, which were all either incorporated in Massachusetts or named the state as their principal place of business, advertised their ICOs on Twitter, Reddit, YouTube and other social media websites.
Individuals associated with the promotions were not registered with Galvin’s office to offer or sell securities. Galvin ordered the ICOs to stop offering and selling unregistered securities and to return cash to investors in case they had raised any funds. The firms were also ordered to provide a list of every refunded investor after paying back the companies.
Galvin said ICOs are often used by companies seeking to avoid investor protection provisions required by federal and state laws. He adivised investors to make sure the people they are giving their hard-earned money to are legitimately doing business.
“Do not be fooled by get-rich schemes trying to capitalize on the current Bitcoin craze,” Galvin said. “An offering done to avoid registration with regulators should be seen as a red flag, and you should contact my office before investing.”
US regulators have, in recent months, started to clamp down on ICOs. In February, Securities and Exchange Commission Chair Jay Clayton said that he believed most ICO tokens were effectively securities and should be regulated as such.