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Minnesota Commerce Department joins other states in international cryptocurrency investment crackdown

5/23/2018 11:11:21 AM

For Immediate Release

SAINT PAUL – The Minnesota Commerce Department announced that it is participating in an international crackdown on fraudulent Initial Coin Offerings (ICOs) and cryptocurrency scams. The department is also warning Minnesota investors that cryptocurrency investment offerings are very risky and highly vulnerable to fraud.

The enforcement sweep is being coordinated by the North American Securities Administrators Association (NASAA), which represents state and provincial securities regulators in the United States, Canada and Mexico.

“Fraudulent cryptocurrency investments are a major threat to Main Street investors,” said Commerce Commissioner Jessica Looman, whose agency currently has several ongoing cryptocurrency-related investigations. “We are committed to protecting Minnesotans from scams involving these investments, and we are working closely with other agencies to stop crypto-criminals who use these schemes to steal real money from people.”

An ICO is an investment offering used by an individual or business startup to raise funds for a new cryptocurrency venture. Other schemes offer ways for people to buy and sell cryptocurrency assets. With fewer investor protections than in traditional securities markets, these investments have significant potential for fraud and manipulation.

The Commerce Department has joined with more than 40 other state and provincial securities regulators in the United States and Canada in “Operation Cryptosweep,” resulting in nearly 70 investigations and 34 pending or completed enforcement actions since the beginning of May.

These actions are in addition to more than a dozen enforcement actions previously undertaken by NASAA members related to these types of products.

An important component of “Operation Cryptosweep” is raising public awareness of the risks associated with ICOs and cryptocurrency investments.

“Cryptocurrency is the new frontier for investment fraud,” said Looman. “Investors should approach these offerings with extreme caution, because there is little chance to get your money back when it is a fraud.”

The Commerce Department website (mn.gov/commerce) includes /commerce/consumers/your-money/investor-education/cryptocurrency.jspinformation on cryptocurrency and /commerce/consumers/your-money/investor-education/initial-coin-offerings.jspInitial Coin Offerings that prospective investors should review to protect themselves when making an investment decision.

Commerce is here to help

If you think you may be the victim of an investment fraud or scam, contact the Minnesota Commerce Department’s Consumer Services Center by email at consumer.protection@state.mn.us or by phone at 651-539-1600 or 800-657-3602 (Greater Minnesota).

Media Contact
Ross Corson
Director of Communications
Minnesota Department of Commerce
p: 651-539-1463 | c: 651-368-5050 | ross.corson@state.mn.us

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