North Dakota Commissioner Takes Action against Fraud ICO Masquerading as Part of a Real Bank

The past couple of months have been quite busy for North Dakota Securities Commissioner Karen Tyler, at least in the crypto-fraud intersection. After the Commissioner had taken action against three different deceptive crypto companies in October, recently another scam that revolved around cryptocurrency was caught in her net.

Commissioner Tyler took action against an alleged fraudulent Russian company called Union Bank Payment Coin with a Cease and Desist Order after the company had pretended to be some sort of offshoot of the (real) bank, Union Bank AG from Liechtenstein, and had illicitly employed the bank’s recent public intentions to issue cryptocurrency and stablecoin of its own (entitled “Blockchain Banking”). UBPC apparently attempted to defraud investors through an initial coin offering (ICO), which was heavily promoted by crooked proclamations associated with Union Bank AG.

According to the official press release by North Dakota Securities Department:

The Union Bank Payment Coin solicitation appears to be an attempt to fraudulently acquire funds through the exploitation of an announcement made by Union Bank AG, a fully licensed and regulated bank based in Liechtenstein. Several elements of the Union Bank Payment Coin website are directly copied from the Union Bank AG website including the stylized elements, verbiage, leadership information and images. The IP address for Union Bank AG is located in Liechtenstein, whereas the IP address for Union Bank Payment Coin is located in Russia and registered to an individual.

Interestingly, Union Bank AG presaged the deceitful endeavor to exploit the bank’s crypto intentions and issued a strong warning for the public already back in August alongside the initial announcement about Blockchain Banking, urging investors to “be aware of potential scammers. The only way to participate in Union Bank AG’s coin offerings is via a direct contact with the bank.”

Commissioner Tyler’s action against the alleged scam company is part of “Operation Cryptosweep” – an American-Canadian joint task force of the North American Securities Administrators Association (NASAA) – which is set to target ICO frauds and already initiated hundreds of investigation and dozens of enforcement actions.