Two Companies in Colorado Cracked Down for Illegal ICO Promotion
The Colorado Department of Regulatory Agencies (DORA) made an announcement in regard to its investigation of two corporations for the promotion of the unlawful ICO to the residents of Colorado. This is according to the Denver Post which was reported on 3rd May.
Therefore, the securities commissioner in Colorado declared that California based Linda Healthcare Corp and also the Washington based Broad investments LLC could be acting in violation of the Colorado Securities law by the ICO promotion.
DORA made a discovery that Linda Healthcare was promoting a “LindaHealthCoin” token on the website which then can be used in the purchase of the Linda HealthCare insurance. In accordance with the website, the token is meant to purchase the telemedical coverage “through an artificial intelligence chat service that creates medical solutions through the use of Blockchain technology.”
In accordance to DORA, there were no warnings offered by Linda Healthcare that the ICOs possess the state of Colorado security. “The Linda Health Insurance network is, to date, not in operation,” the officials reported.
According to the tweet made on 19th March;
According to the reports by Denver, Broad investments firm is in the promotion of cryptocurrency by use of a token which is described in the website as “an equity coin that represents shares of the company, like company stocks.” Therefore, the token would grant the holders the right of sharing the returns from the Broad Investments strategy which is involved in the building of the stock portfolios with an algorithm. Officials then made a claim that the “math-oriented value system” was not working.
Therefore, DORA representative reports that the two organizations did not give the information according to the investment risks in ICOs or the crypto in their websites. According to Gerald Rome who is the Colorado Securities Commissioner; “Investment opportunities being sold through ICOs over the internet need to be approached with the same level of caution as for any highly risky investment venture.”
The organizations should provide a proof why sanctioning should not be done under the Colorado Securities Exchange Act. However, in March, the Massachusetts securities division issues various consent orders which require five firms to be suspended permanently due to the fact that they were selling securities which were unregistered.