Colorado Investigating Two Companies Over Illegal ICO Promotion

Jordana Sacks
  • Two companies are currently under investigation for allegedly promoting illegal initial coin offerings to denizens of Colorado.
  • The onus is now on the accused businesses to prove that they should not be issued sanctions.

The Colorado Department of Regulatory Agencies is investigating the actions of two companies accused of promoting illegal initial coin offerings (ICOs) to residents of the state. According to the region’s securities commissioner, Linda Healthcare Corp. (based in California) and Broad Investments LLC (based in Washington) may be in violation of securities laws pertaining to initial coin offerings.    

Linda Healthcare is accused of promoting a currency listed as the Linda Health Coin, which could reportedly be used to buy health insurance with the company. This would grant access to its telemedicine offerings: an artificial intelligence chat service that provides medical solutions through the medium of blockchain technology.  

The issue with this is that Linda Healthcare’s website fails to either provide potential buyers with an insight into the risks associated with investing in cryptocurrency, or to inform them that the initial coin offering in question constitutes a security in the state of Colorado.

Broad Investments has also invited the regulatory body’s ire. Alleged to have been promoting crypto through a token on their website, which they describe as “an equity coin that represents shares of the company, like company stocks”, they have also found themselves faced with the possibility of sanctions.  

Colorado Securities Commissioner Gerald Rome stated that: “Investment opportunities being sold through ICOs over the internet need to be approached with the same level of caution as any highly risky investment venture." He added:

“Most ICOs meet the terms of a securities transaction and carry with them all of the same risks when it comes to losing money. If you are investing money in any kind of cryptocurrency such as a coin or token where you are expecting to reap returns and are relying on those returns to come from the efforts of an outside party, you are dealing with investments.”

Gerald Rome

Per his words, “ICOs are highly risky,” and only sophisticated investors who understand they can lose whatever they invest should put their money in them. Both Linda Healthcare and Broad Investments must now prove that the issuing of sanctions would be unfair as per the Colorado Securities Act if they want to avoid them.

Cryptocurrency Supporter Andrew Yang Ends Presidential Campaign

Andrew Yang, a democratic presidential candidate who openly called for nationwide cryptocurrency regulations, has ended his presidential bid early over poor results seen so far.

Speaking to reporters in New Hampshire, Yang revealed he didn’t believe he was going to “win the race” and as such announced he was suspending the campaign:

I am the math guy, and it is clear tonight from the numbers that we are not going to win this race. I am announcing that I am suspending my campaign for president.

His presidential campaign was launched in November 2017 and saw him call for a universal basic income of $1,000 to every American adult, at one point inspiring TRON’s Justin Sun to give away $12 million to 100 people this year.

Yang’s campaign website criticized current cryptocurrency regulations in the U.S., pointing out different departments of the federal governments see cryptos in different ways and adding some “states have onerous regulations in the space,” and that navigating them “has had a chilling effect on the U.S. digital asset market.”

It also called for Americans to be “able to vote via their mobile device, with verification done via blockchain.” During his campaign, Yang also made it clear he believes people will be investing in cryptocurrencies one way or another, and as such regulations wouldn’t be able to stop them even if they tried.

He also mentioned the country should invest more in bitcoin’s underlying blockchain technology, pointing out various potential use cases for it – one of them voting. Yang’s campaign was taking in cryptocurrency donations, but ended after reportedly investing millions and spending weeks on a bus tour in Iowa, to only receive 1% support.

Featured image by Srikanta H. U on Unsplash.