The North Dakota Securities Department, responsible for the enforcement of the securities laws in the U.S. state, has issued a cease and desist order against Union Bank Payment Coin (UBPC) for allegedly promoting a fraudulent initial coin offering (ICO).

The financial watchdog accuses the firm of being a copycat of Liechtenstein-based Union Bank AG, which is a pioneer in the cryptocurrency space.

The order, issued by Commissioner Karen Tyler, is the result of ongoing investigations being conducted by the Department’s ICO Task Force and part of Operation Cryptosweep, a multi-jurisdiction enforcement effort involving over 40 U.S. and Canadian securities regulatory agencies.

Union Bank Payment Coin and its associates have been ordered to stop promoting the unregistered and potentially fraudulent crypto fundraiser in North Dakota.

The fraudulent website attempts to appropriate the cryptocurrency project of the Liechtenstein bank under the name of Union Bank Payment Coin, which is similar to the name of the real bank, Union Bank AG.

UBPC uses the same wording of the real project, including being a “security token offering” for the investment in a tool “designed to store wealth by utilizing income-producing digital assets.” The company, which claims it seeks to become the “world’s first security token backed by a fully licensed bank,” says it is issuing a stablecoin backed by the Swiss Franc (CHF).

Unlike the real Union Bank AG, which is located in Liechtenstein, the IP address for Union Bank Payment Coin is located in Russia and registered to an individual, according to Tyler.

“Because ICOs are sold over the internet and pitched heavily through social media platforms, North Dakotans can be exposed to the offers whether the promotor is down the street or on the other side of the globe. Financial criminals continue to cash in on the hype and excitement around blockchain, crypto assets, and ICOs – investors should be exceedingly cautious when considering a related investment.”

The real Union Bank has announced it is launching its own cryptocurrency in August 2018. Its plan is to take advantage of the principality’s blockchain-friendly regulations to issue its own security tokens and a fiat-backed digital currency. The bank is looking to position itself as a full-service blockchain investment bank.

“As a fully licensed and regulated bank we are in a privileged position to combine all the advantages of traditional banking with the possibilities inherent in the blockchain technology. As such, our fiat-backed Union Bank Payment Coin has the potential to disrupt the approach to international trade and international cross-border transactions.”

Related Reading:The UK’s Financial Conduct Authority Is Investigating 24 Crypto Firms

Talk of the fraudulent ICO can be traced back to October on the Bitcointalk.org forum. The North Dakota regulator warned investors of hackers “spoofing” legitimate ICOs to intercept and steal investor money.

The post North Dakota Regulator Issues Cease and Desist Order Against Union Bank ICO Fraud appeared first on NewsBTC.

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