Attorney General Frosh Announces Coordinated Cryptocurrency Crackdown

News Release, Office of Maryland Attorney General Brian Frosh

BALTIMORE, MD (August 14, 2019) – Maryland Attorney General Brian E. Frosh announced today that his Securities Division is participating in the nationwide “Operation Cryptosweep,” an initiative of the North American Securities Administrators Association (NASAA).  Since the beginning of the year, 35 enforcement actions against Initial Coin Offerings (ICOs) and cryptocurrency-related investment products have been completed by state and provincial securities regulators in the United States and Canada.

The Maryland Securities Division has initiated an enforcement action against a Bitcoin trading platform, which led its investors to believe they could earn as much as 150% through passive investments, and a Maryland resident who sold investments in the trading platform.

Recent headlines touting the possibility of new cryptocurrency products (such as one backed by Facebook), and the surging value of some cryptocurrencies (such as Bitcoin) with a sharp increase in market capitalization for all cryptocurrencies, create an environment that can attract promoters of illegal and fraudulent securities schemes.  Investors and con artists alike have turned to cryptocurrency-related investment products looking for quick profits.  Investors should be wary of any investment that promises quick profits with low risk.

“Cryptocurrency investments are risky.  Investors should be extra cautious when dealing with promoters who claim their offering does not have to be registered with securities regulators,” said Attorney General Frosh. “Quick returns of 150% are as rare as Bigfoot.  Make sure to do independent research the product before you invest.  Be aware of the risks, and contact the Maryland Securities Division with any concerns before parting with your hard-earned money.”

To help raise investor awareness, the Maryland Securities Division announced a new video in the “Get in the Know” series produced by NASAA that examines common crypto investment schemes and provides instructions on guarding against becoming a victim.  The video is available on NASAA’s website www.nasaa.org.  The animated video also outlines common concerns investors should consider before investing in any offering containing cryptocurrency, including:

  • Volatility: Cryptocurrency markets are highly volatile, making them unsuitable for most investors looking to meet long-term savings or retirement goals.
  • No recourse: Cryptocurrency and many crypto-related investments are subject to little regulatory oversight, and there may be no recourse should the cryptocurrency disappear due to fraud or a cybersecurity breach.
  • Untraceable: Cryptocurrency or crypto-related investments only exist on the Internet.  Issuers can be located anywhere in the world, so it may be impossible to trace and recover lost funds through the courts. 

According to the Maryland Securities Commissioner, not every cryptocurrency-related investment offer is a fraud, but it is important for individuals and firms selling these products to understand that state and provincial laws or regulations may apply to these sales, especially securities laws.

The Maryland Securities Division can be reached at securities@oag.state.md.us or 410-576-6360.

The Southern Maryland Chronicle is a local, small business entrusted to provide factual, unbiased reporting to the Southern Maryland Community. While we look to local businesses for advertising, we hope to keep that cost as low as possible in order to attract even the smallest of local businesses and help them get out to the public. We must also be able to pay employees(part-time and full-time), along with equipment, and website related things. We never want to make the Chronicle a “pay-wall” style news site.

To that end, we are looking to the community to offer donations. Whether it’s a one-time donation or you set up a reoccurring monthly donation. It is all appreciated. All donations at this time will be going to furthering the Chronicle through hiring individuals that have the same goals of providing fair, and unbiased news to the community. For now, donations will be going to a business PayPal account I have set-up for the Southern Maryland Chronicle, KDC Designs. All business transactions currently occur within this PayPal account. If you have any questions regarding this you can email me at davidhiggins@southernmarylandchronicle.com

Thank you for all of your support and I hope to continue bringing Southern Maryland the best news possible for a very long time. — David M. Higgins II




© 2019 The Southern Maryland Chronicle. All Rights Reserved. This website is not intended for users located within the European Economic Area.