What has happened?
The US state of Vermont is accusing a Californian firm of allegedly violating the state securities legislation.
What does this mean?
The Vermont Department of Financial Regulation has issued a cease-and-desist order to LevelNet, of Irving, California, "for violations related to the Vermont Uniform Securities Act" and ordered it to stop advertising and selling in the state.
According to its press release, the regulator said that LevelNet is conducting an initial coin ofering (ICO) seeking to raise money from investors across the country in exchange for their newly created cryptocurrency.
LevelNet is accused of violating Vermont law by "deceptively advertising unfounded and unrealistic investment returns and failing to properly register the investment".
This move is part of "Operation Cryptosweep", a series of enforcement actions by state regulators co-ordinated by the North American Securities Administrators Association (NASAA) to crack down on fraudulent cryptocurrency-related investment schemes.
NASAA members from more than 40 jurisdictions participated in the operation, which has so far resulted in almost 70 inquiries and investigations and 35 pending or completed enforcement actions related to ICOs or cryptocurrencies since the beginning of May.
Vermont had previously issued a cryptocurrency investor alert, warning Vermonters about promises of exaggerated profits and that many fraudulent investment schemes involve unlicensed individuals or unregistered investments.
Last month, the governor of Vermont, Phil Scot, signed a bill allowing the creation of so-called "blockchain-based limited liability companies".
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