The initial coin offering (ICO) sector was somewhat rocky as a whole when it first started to become popular in 2017. There was a lot of money flooding into this sector that had little to no regulations or oversight in place.
The authorities across the world had largely been caught off-guard at this sudden explosion in growth. A lot of investors were putting money into projects that they did not know much about and this led to a large increase in the number of fraudulent token sales.
It was the perfect mix for these fraudsters as the authorities were unlikely to catch them and there was a lot of money up for grabs. Thankfully, this situation has massively improved as authorities have developed guidelines and regulations for ICOs.
One of the chief operations in the United States and Canada when it came to spotting fraudulent ICOs was Operation Cryptosweep. They have now expanded their focus to more than 200 different token sales
What are the details about this latest expansion?
The North American Securities Administrators Association (NASAA) has been a key member of this group and to date since May they have increased their investigation from 70 offerings, all of the way up to 200 offerings. With more than $18 billion having been raised to date through ICOs, this operation could put a serious dent in this number growing significantly in the United States.
Through the course of their investigations, they have realised that there is in fact a whole lot more offerings that are not being compliant with the various rules and regulations than they previously believed.
This requires action and they are committed to opening investigations upon each of the offerings they have identified to date. While some of these might be outright scams, a lot of them might not be following the appropriate securities laws.
There has been an ongoing debate in the sector as to whether certain tokens are to be classified as being a utility token or as a security. The authorities generally say that all tokens are securities, whereas most offerings seem to believe that their tokens are utility tokens.
As a result, if the tokens do not follow securities laws, they will not be compliant with the relevant securities laws.