Massachusetts is cracking down on cryptocurrencies.
The office of Massachusetts Secretary of State William Galvin announced on Tuesday that it had halted initial coin offerings (ICOs) from five firms, claiming that the sale of digital tokens amounts to the unregistered offering of securities.
In a series of orders, Galvin’s office halted ICOs from 18moons in Newton, Mass.; Across Platforms in Boston; Mattervest in Belmont, Mass.; Pink Ribbon ICO in Marston Mills, Mass.; and Sparkco Inc. in Cambridge, Mass.
Some of the firms had planned or initiated the sale of millions of dollars worth of cryptocurrency tokens. For example, Sparkco, a freelance platform business, had a plan to sell $18 million worth of a digital coin called Librium. 18moons, on the other hand, planned to sell up to $10 million worth of “Planet Kids Coins” to support the production and distribution of children’s programming.
Other firms had different aims that never got off the ground. Mattervest had planned on an ICO to pool investor funds for the purchase of other cryptocurrencies. Pink Ribbon ICO claimed to support “women and families facing financial burdens from cancer.”
ICOs are a form of crowdfunding where a firm sells cryptocurrencies, tokens built on blockchain technology, to raise capital – with the benefits of avoiding intermediaries like banks and venture capitalists, and, until recently, regulation.
Each firm consented to a cease-and-desist order and a censure.
In January, Galvin targeted Caviar, a Brookline, Mass., one-man real estate concern selling unregistered “Caviar Tokens” to support a house-flipping business and the acquisition of other cryptocurrencies.