Three Crypto Companies Suspected of Running Fraudulent ICOs in Colorado

Colorado authorities have signed cease and desist orders for three cryptocurrency companies promoting unregistered Initial Coin Offerings (ICOs) within state lines. The orders come as part of a broader investigation of allegedly fraudulent companies operating crypto-related scams as reported by the Department of Regulatory Agencies (DORA).

Colorado Securities Commissioner Gerald Rome has assembled an ICO task force for the purposes of identifying companies or individuals that might pose a risk to Colorado investors. The three companies currently under investigation are Bionic Coin, Sybrelabs Ltd. (CryptoARB) and Global Pay Net (GLPN Coin, GPN Token). Colorado’s ICO Task Force has also been responsible for investigating Bitcoin Investments Ltd (DB Capital), EstateX, Magma Foundation (Magma Coin), and most infamously, Bitconnect Ltd.

“Bionic Coin’s website, bionic-coin.io, which is accessible by Colorado residents, provides information for an ICO named ‘Bionic’ or ‘BNC,’ the purpose of which is to enable instant payments to anyone, anywhere in the world, and to simplify the purchase of electronic devices and software,” reads a press release from DORA. “The site has information regarding the sale of its tokens, a whitepaper, blogs and frequently asked questions, and promises ‘Bionic will grow your money without any effort.’ The site also lists supposed media partners such as Forbes magazine, but investigators could not locate any reference to such a company or product on the sites purportedly promoting it.”

Bionic’s site reportedly claims to offer those who promote Bionic on popular social media sites and blogs with up to ten thousand tokens per post. The company has no physical address or listed employees on the site.

“Sybrelabs Ltd., allegedly located in Cambridgeshire, England, also promotes an unregistered security to Colorado residents in the form of an investment pool that allows for trading on cryptocurrency exchanges through what is represented as a ‘cryptoarbitrage robot,’ or a tool that would allow the company to ‘automate many factors occurring with effective arbitrage on several instruments,” said DORA.

Sybrelab’s website Cryptoarb.org offers a wide range of investment portfolios, ranging from $25 to $25,000, while promising large returns to investors. The site actively pushes members to solicit others to join its investment pool and offers marketing materials, PDF presentations, online banners and souvenir products.

Lastly, Global Pay Net is marketing an ICO to Colorado residents through the sale of its ‘GLPN Coins’, which are purported to help build an international financial platform based in blockchain technology.

“A description of the coin offering states that GLPN coins are ‘full-value assets that represent one’s share in the business’ and that ‘investors receive 80 percent of the company’s profits,’” reports DORA. “The site also lists multiple cryptocurrency professionals as being involved, two of whom have denied that this is the case.”

Global Pay Net’s website had also claimed to have filed with the United States Securities and Exchange Commission’s (SEC) EDGAR database. However, the phone number linked to the listing has been disconnected. DORA reports that it was unable to find any business filing in Washington state, where Global Pay Net claims to be based. Like the other companies under investigation, Global Pay Net was offering individuals up to five thousand GLPN coins per social media post for promoting the company’s likely fraudulent ICO.