Vermont Orders Cease and Desist to Cryptocurrency Company

June 05

In an earlier post, we reported on the North American Securities Administrators Association (NASAA)’s Operation Cryptosweep, coordinated series of enforcement actions by state regulators to crack down on fraudulent cryptocurrency-related investment schemes.  Under that operation, the Vermont Department of Financial Regulation issued, on June 4, a cease and desist order to LevelNet, of Irving, California, for violations related to the Vermont Uniform Securities Act.

According to the department, LevelNet is conducting an ICO seeking to raise money from investors across the country in exchange for their newly created cryptocurrency. The department’s investigation determined LevelNet is violating Vermont law by deceptively advertising unfounded and unrealistic investment returns and failing to properly register the investment. The department ordered LevelNet to immediately stop advertising and selling in Vermont.

The department 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.

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David Zaslowsky has a degree in computer science and, before going to Yale Law School, was a computer programmer. He is currently the Chairman of the Litigation Department of the firm’s New York office. His practice focuses on international litigation and arbitration. He has been involved in cases in trial and appellate courts across the United States and before arbitral institutions around the world. Many of David’s cases, including some patent cases, have related to technology. Since 2008, David has been included in Chambers for his expertise in international arbitration.

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