Secretary of State Connie Lawson reminds investors and offerors to use caution with cryptocurrency investments
INDIANAPOLIS — Indiana Secretary of State Connie Lawson is again reminding Hoosiers to be cautious about investments involving Initial Coin Offerings (ICOs) and cryptocurrency-related investment products. She is also reminding those who seek to sell these products to be aware of the laws pertaining to these investments.
“While not every ICO or cryptocurrency-related investment is a fraud, it is important for individuals and firms selling these products to be mindful that they are not doing so in a vacuum; Indiana laws or regulations may apply, especially securities laws. Sponsors of these products should seek the advice of knowledgeable legal counsel to ensure they do not run afoul of the law. A strong culture of compliance should be in place before, not after, these products are marketed to investors.”
If these products qualify as securities, they should be registered with the appropriate regulatory agencies or qualify for an exemption from registration. The registration process provides some protection for investors by subjecting the offering to regulatory review. But even registered offerings can be fraudulent. Investors therefore should perform their own thorough due diligence before investing in any ICO or cryptocurrency-related product.
“Be cautious when dealing with promoters who claim their ICO offering is exempt from securities registration but do not ask about your income, net worth or level of investing sophistication,” Indiana Securities Commissioner Alex Glass said. “Do your homework and contact the Secretary of State’s office with any concerns before parting with your hard-earned money – afterwards may be too late.”
In May, the North American Securities Administrators Association (NASAA), of which the Secretary of State’s Office is a member, launched “Operation Cryptosweep.” This ongoing initiative is a coordinated series of investigations into ICOs and cryptocurrency-related investment products. To date, there have been 47 enforcement actions involving ICOs or cryptocurrency-related investment products throughout North America by state and provincial securities regulators.
“My office is committing the necessary regulatory resources to protect investors in Indiana from financial harm involving fraudulent ICOs and cryptocurrency-related investment products and also is raising awareness among industry participants of their regulatory responsibilities,” said Secretary Lawson.
The Secretary of State, Securities Division can be reached at 317-232-6681 or through its website at www.in.gov/sos/securities.
SOURCE: News release from the Office of Indiana Secretary of State Connie Lawson