The state of North Dakota in the US has served a cease and desist order to a company that claims to “offer security services for cryptocurrency.” This news was disclosed on Monday, Nov. 19, by Karen Tyler, the State Securities Commissioner.

According to Tyler in a press release, the company known as Union Bank Payment Coin (UBPC) is alleged to have promoted potentially fraudulent and unregistered securities in North Dakota through an initial coin offering (ICO) – a method of financing that is used by startups in the crypto industry to raise funds for their projects.

Tyler goes ahead to warn citizens of the state to be on the lookout for fraudulent activities related to the crypto community. Part of her statement reads thus: “Because ICOs are sold over the internet and pitched heavily through social media platforms, North Dakotans can be exposed to the offers whether the promoter is down the street or on the other side of the globe.” Furthermore, Tyler stated that: “Financial criminals continue to cash in on the hype and excitement around blockchain, crypto assets, and ICOs – investors should be exceedingly cautious when considering a related investment.”

A major UBPC objective was to be the “world’s first security token backed by a fully licensed bank.” On the contrary, the North Dakota Securities Department has accused the company of attempts to acquire funds fraudulently “by exploiting an announcement by Union Bank AG, a bank based in Liechtenstein, a tiny European country.”

Elaborating more on the reason for the action taken by the authorities, the press release reads: “The UBPC website further indicates that the Union Bank Payment Coin is a security token offering that is invested in as a tool or mechanism designed to store wealth by utilizing income-producing digital assets. The company also represents it is issuing a stable coin that is fully backed by a fiat currency – the Swiss franc.”

The order by North Dakota came as a result of an ICO Task Force that was set up through Tyler’s office in a bid to identify cryptocurrency-related investments that could be risky to North Dakotan investors. The Force is also part of a multi-jurisdiction investigation called Operation Cryptosweep that include “agencies from 40 US and Canadian securities regulators.”

In conclusion

Union Bank Payment Coin, a company claiming to offer security services for cryptocurrency, has been issued a cease and desist order by North Dakota. The company was accused of promoting potentially fraudulent and unregistered securities in the state through its ICO.

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