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Retirement Planning > Social Security

Galvin Halts 5 Firms’ ICO Sales in Massachusetts

By Melanie Waddell

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William Galvin, the top securities regulator in Massachusetts, said Tuesday that he has ordered five firms purportedly utilizing blockchain technology to halt their offering and selling of unregistered securities in the state via social media platforms like Twitter and YouTube.

The halt is a result of an exam sweep Galvin launched in mid-December of entities based in Massachusetts raising money from initial coin offerings.

The five firms were promoting virtual coins in Massachusetts, according to Galvin. The Massachusetts Securities Division entered into consent orders with: Mattervest Inc. of Belmont, Pink Ribbon ICO of Marston Mills, Across Platforms Inc. of Boston, Sparkco Inc. of Cambridge, and 18 moons of Newton.

The firms were offering and promoting the ICOs through Twitter, Reddit, YouTube and other social media sites.

Galvin ordered the firms to stop offering and selling unregistered securities and to offer rescission to anyone sold unregistered securities. Each firm’s final order included a censure.

A spokesperson for Galvin’s office told ThinkAdvisor on Tuesday that the commonwealth secretary “has put together a team of enforcement attorneys to police this [ICO] area, and their work is ongoing.”

ICOs, Galvin warned, are often used by firms seeking to avoid investor protection provisions required by federal and state laws.

“I encourage anyone in Massachusetts who is thinking of investing in these new initial coin offerings to make sure the people they are giving their hard-earned money to are legitimately doing business,” Galvin said in a statement.

“Do not be fooled by get-rich schemes trying to capitalize on the current Bitcoin craze,” Galvin said. “An offering done to avoid registration with regulators should be seen as a red flag, and you should contact my office before investing.”

Galvin in mid-January charged a Brookline man and his company with the unregistered sale of a security marketed as “Caviar Tokens,” which would be used to fund house-flipping real estate projects, in addition to financing the acquisition of a portfolio of various cryptocurrencies.

— Related on ThinkAdvisor:

Melanie Waddell

@Think_MelanieW

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