North Dakota’s securities watchdog has issued a cease-and-desist order against a Russia-based initial coin offering (ICO) that appeared to impersonate Liechtenstein-based Union Bank AG to promote “unregistered and potentially fraudulent securities.”
On Monday, Karen Tyler, commissioner of the North Dakota Securities Department, said that the website of the supposed ICO project – called Union Bank Payment Coin (UBPC) – had “directly copied” elements from the Union Bank website, including style, wording, leadership information and images.
Claiming to be the “world’s first security token backed by a fully licensed bank” and offering a “stable coin that is fully backed by a fiat currency – the Swiss franc,” UBPC looked to be an attempt to defraud investors by basing its claims on a legitimate blockchain announcement made in August by the regulated and licensed bank, Tyler said.
While the IP address for Union Bank's website is located in Liechtenstein, UBPC's is located in Russia and is registered to an individual, according to the statement.
“Union Bank AG is, of course, not the subject of this Cease and Desist Order. Please be aware of potential scammers,” the bank told CoinDesk in an email response.
“Because ICOs are sold over the internet and pitched heavily through social media platforms, North Dakotans can be exposed to the offers whether the promoter is down the street or on the other side of the globe," Tyler said, adding:
This is not the first time the watchdog has taken action against companies promoting suspect ICOs in the state. Last month, it issued orders against three others: Crystal Token, Life Cross Coin and Advertiza Holdings.
The story was updated to add Union Bank AG’s comment.
Russian dolls image via Shutterstock
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.