ICO Mimicking Liechtenstein Bank’s Coin Project Halted by North Dakota Securities Commissioner

North Dakota’s securities commissioner has banned a fake ICO called Union Bank Payment Coin (UBPC) within the state’s borders due to legal violations.

Karen Tyler, the securities commissioner of US state of North Dakota, has issued a cease and desist order against a fake initial coin offering (ICO) project, called Union Bank Payment Coin (UBPC). The company was offering unregistered securities to the state’s investors and engaging in “potentially fraudulent” activities by imitating a real cryptocurrency project by Liechtenstein’s Union Bank, Tyler said on Monday.

The UBPC website, unionbankingag-invest.com, was visually similar to the bank’s official internet home – unionbankag.com. The fake ICO claimed that it would create “world’s first security token backed by a fully licensed bank.” The virtual currency was marketed as a stablecoin, pegged by Swiss franc. The ICO accepted payments only with Bitcoin (BTC), and Ethereum (ETH).

The securities commissioner’s investigation found that while the Union Bank IP address is based in Liechtenstein, the UBPC location is in Russia. A Ukrainian web designer named Bohdan Kozachok owns the domain, Tyler explained in the order. Kozachok registered unionbankingag-invest.com on August 29, twelve days after Union Bank, which is an officially licensed financial institution in Liechtenstein, announced its cryptocurrency project.

UPBC website was not working as per Cryptovest check on Wednesday midday UTC.

“Because ICOs are sold over the internet and pitched heavily through social media platforms, North Dakotans can be exposed to the offers whether the promoter is down the street or on the other side of the globe,” Tyler said in the press release.

The North Dakota’s investigation against UBPC is part of Cryptosweep, an ongoing operation of around 40 US and Canada’s regulators against virtual coin Ponzi schemes.

“Common red flags of fraudulent ICOs include plagiarized white papers containing spelling and translation errors, fictitious executive teams represented by stock internet photos, fake business addresses and phone numbers, fake celebrity endorsements, the promise of no risk and high returns, false claims about securities law compliance, and the promise of additional ICO tokens for promoting the deal and bringing in other investors,” North Dakota securities office explained.

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