Since the very beginning, the cryptocurrency industry has been plagued by a host of nefarious projects and scammers. Now, thanks to the North American Securities Administrators Association, a lot of these fraudulent projects are being weeded out swiftly. Over 200 initial coin offerings are currently under investigation, albeit that doesn’t make all of them illegal by definition. However, more scrutiny is always a good thing for this digital sector.
Scrutinizing ICOs is Necessary
Despite the overall appeal that initial coin offerings have for investors, they remain one of the biggest financial threats to the crypto market today. Very few people properly research an ICO before throwing thousands of Dollars at the project, thus allowing scammers and bad actors to earn millions without delivering on promises or even developing a working product.
In this regard, the NASAA is actively conducting a thorough review of all the current initial coin offerings available on the market today. While this is a daunting task, the agency has scored some big victories in the process.
Details of the Big Clean Up
Known as Operation Cryptosweep, the NASAA is intent on legitimizing the ICO industry. With projects falling victim to securities fraud, it is evident that there is still plenty of work to be done. Moreover, legislators contributing their efforts to this venture have already identified a lot of other “violations” which projects need to be made aware of.
For the time being, investors need to remain cautious when dealing with ICOs, especially since very few projects are exempt from securities registration in the US and Canada. However, a lot of promoters gladly claim otherwise in the hopes of securing additional investments.
The issues affecting initial coin offerings cannot be blamed on investors alone. Token creators need to maintain an open dialog with local/national legislators and policymakers in order to foster a healthy ecosystem wherein all of the involved parties can feel safe and secure.