Colorado Issues Cease And Desist Order To Healthcare ICO

Colorado Securities Commissioner has issued a cease and desist order halting a Florida based firm’s initial coin offering (ICO), saying it is offering an unregistered security.

Securities Commissioner Gerald Rome issued the order to Linda Healthcare Corporation and its founder, Arturo Devesa, reaffirming a ruling made by administrative Judge, Matthew Norwood, last month.

While issuing the order, Rome warned “ICOs are highly risky and should only be undertaken by sophisticated investors with the understanding that they may lose most or all of their funds.” “Most ICOs meet the terms of a securities transaction and carry with them all of the same risks when it comes to losing money,” according to him.

The Division of Securities, part of the Department of Regulatory Agencies (DORA), launched an investigation in April after noticing that the website of Linda Healthcare Corporation is promoting an ICO for a cryptocurrency listed as “Linda Health Coin” (LNDA).

According to the website, LNDA can be used to purchase specific “Linda Health Insurance” covering telemedicine through an artificial intelligence chat service that creates medical solutions through use of blockchain technology.

The Colorado Securities Commissioner noted that the ICO issuer did not disclose to potential buyers of LNDA coin about the risks of investing in cryptocurrency. Also, Linda Healthcare Corporation claimed that the ICO constitutes a security in the state of Colorado.

Based on an investigation, the Commissioner issued an order to show cause in May, resulting in the decision by Judge Norwood and subsequent cease and desist order.

While Linda Healthcare stated that the initial coin offering is like a crowd-funding campaign rather than a profit-sharing or equity offering, Judge Norwood sided with Commissioner Rome in finding that the ICO, as detailed in the company’s white paper and website, falls under the terms of an “investment contract.”

Rome advised potential investors, “Investment opportunities being sold through ICOs over the internet need to be approached with the same level of caution as any high risk investment ventur.”

“If you are investing money in any kind of cryptocurrency, such as a coin or token where you are expecting to reap returns and are relying on those returns to come from the efforts of an outside party, you are dealing with investments,” he clarified.

by Joji XavierRTTNews Staff Writer

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