3 ICOs hit with Cease-and-Desist orders in Alabama

Alabama ICO's Cease and Desist

In a cease-and-desist order entered last May 2nd and revealed May 24th, the Alabama Securities Commission has ordered cryptocurrency mining firm Extrabit to stop its token sale offering in the state.

Extrabit allegedly illegally solicited Alabama investors with what the regulatory commission considers an unregistered securities offering after it advertised its token sale on WSFA’s website, an NBC-affiliated TV station licensed in the state capital, Montgomery.

The ASC said in the order that the firm originally claimed that investors in the pre-ICO phase could purchase Extrabit’s token “EXB” at 50% off.

“To participate in the pre-sale, the user must invest $20,000 and after the purchase, the tokens will be sent to MyEtherWallet within 48 hours,”

 the agency quoted the original ad, which has now been taken down, as saying.

Extrabiot’s whitepaper claimed that it could promise a 185 percent return on investment every quarter for investors who maintain a positive balance in their EXB wallet. They claimed that the firm generates profits from mining bitcoin, zcash, and monero.

The ASC also claimed Extrabit made misleading statements to defraud investors.

The ASC also sent cease-and-desist orders to two other ICOs, named LEV and Platinum, last May 2nd and May 18th, respectively.

The ASC is the latest in a series of state-level regulatory commissions that have stepped up efforts in combatting potentially fraudulent projects.

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