The North Dakota Securities Department has slapped the Union Bank Payment Coin (UBPC) with a cease and desist order for purportedly advertising fraudulent initial coin offering (ICO).
The financial watchdog, which enforces securities laws in North Dakota, accuses UBPC of mimicking Liechtenstein-domiciled Union Bank AG, a pioneer in the crypto space.
Issued by Commissioner Karen Tyler, the order is the product of current investigations being conducted by the agency’s ICO Task Force. The move is also part of Operation Cryptosweep, an association composed of 40-member strong U.S. and Canadian securities and regulatory agencies.
The UCPC, together with its partners, has been barred from promoting the unregistered and possibly fraudulent crypto fundraiser in the state of North Dakota.
Its deceptive website tries to exploit Union Bank AG’s crypto project by using the name Union Bank Payment Coin, which is almost identical to the bank’s name.
The UBPC project also makes use of the same terminologies of the original project, even the part saying it is a “security token offering” for the investment in a mechanism “designed to store wealth by utilizing income-producing digital assets.” The company, which professes it wants to become the “world’s first security token backed by a fully licensed bank,” states that it aims to release a stablecoin pegged to the Swiss Franc (CHF).
Commissioner Tyler says that unlike the true Union Bank AG, headquartered in Liechtenstein, the IP address for the Union Bank Payment Coin can be traced to Russia and is registered to a certain individual. She adds by saying:
“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 true Union Bank has initially revealed it is issuing its own digital currency in August of this year. It originally plans to leverage on the jurisdiction’s Blockchain-friendly stance in releasing its own security tokens and a fiat-supported cryptocurrency. The bank seeks to introduce itself as a full-service Blockchain investment bank. It states:
“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.”