The Vermont Department of Financial Regulation has issued a cease and desist order against cryptocurrency startup LevelNet (LVL) for violations related to the Vermont Uniform Securities Act.
According to the order, LevelNet (LVL) is conducting an initial coin offering (ICO) seeking to raise money from investors across the country in exchange for their 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 the state.
The startup is developing a «decentralized antivirus platform» to be shared by members of its network.Its website claims the LVL token will give its holders several advantages, such as the possibility to access LevelNet services and all its products. LevelNet also claims that investors could see a 20-fold return on their money in 4 to 5 years. Approximately $752 000 has been raised during the ICO.
According to Michael Pieciak, the state’s Financial Regulation commissioner, if the project convinces someone they can make a quick dollar – this is usually a red flag.
LevelNet said in a statement it has «discontinued all sales and promotional efforts related to crypto token offerings» in the USA. It added that the company spent a lot of time trying to meet USA regulatory and legal requirements, but is now «forced to exit» the USA market.