The Securities Commission of the State of Alabama (ASC) ordered the distribution of tokens from the Mining Company Extrabit to be discontinued within the state. This is stated in the official document of the ministry.
ASC claims that the advertising of tokens on the WSFA website (affiliated with the NBC television company with a license in Montgomery, the capital of the state) was an offer of unregistered securities, that is, the company draws funds from Alabama investors illegally. Advertising indicated that investors can purchase the Extrabit (EXB) token at a 50% discount during the pre-ICO, ASC said. This ad is already removed from the site.
“To participate in the presale, the user must invest 20 thousand dollars. After purchase, the tokens will be sent to MyEtherWallet within 48 hours “, – the agency quotes the original announcement.
In addition, the white paper of the Extrabit project indicates that the firm generates profits from the production of Bitcoin (BTC), Zcash (ZEC) and Monero (XMR), and investors who maintain a positive balance of the EXB wallet can expect a profitability of 185% quarterly (740% per annum).
ASC argues that the project not only put up unregistered securities for sale, but also made “materially misleading” statements to deceive and attract investors and should stop the presale.
According to officials, Extrabit is not the only ICO project that threatens Alabama residents. The Google search bar on the WSFA website, on request, “sell tokens”, produces over 200 ads in the style of press releases from various ICO projects.
Two other ASC orders, on May 2 and 18, respectively, relate to the termination of the ICO projects LEV and Platinum. As in the case of Extrabit, the agency accused them of selling unregistered securities in Alabama, through advertising with unrealistic promises regarding the likely return on investment to potential investors.
The ASC solutions followed the actions of their colleagues from Texas and New Jersey, who focused on cryptocurrency projects that attracted investments at the local level, and took action against some of them.