State regulators unveiled their latest crackdown on cryptocurrency businesses operating in New Jersey, arguing two of them – Zoptax LLC and Unocall – defrauded investors by selling unregistered securities, and need to suspend their business dealings in the state.
The measure announced Wednesday by Attorney General Gurbir Grewal is part of the international crackdown on cryptocurrencies known as “Operation Cryptosweep.”
Since May 2018, securities regulators have opened 130 separate investigations into businesses’ “initial coin offerings,” which are the crypto-market’s equivalent of the initial public offering that companies going public and entering the stock market offer to investors.

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The most popular and well-known crypto-coin is Bitcoin, which like any other form of cryptocurrency can fluctuate wildly during short time-frames. Bitcoin started at several hundred dollars in 2014, peaking at nearly $20,000 per Bitcoin in December 2017 before reaching a low point of $8,000 last December. It is now valued at roughly $12,000 per Bitcoin.
This fluctuation could provide an enormous risk to investors, as could its lack of state and federal regulation—something regulators have grappled with in recent years.
“With the price of Bitcoin increasing over the last few months and the announcement of Facebook’s Libra, there has been a sharp increase in public solicitations to invest in crypto-related products that appear on their face to be suspect,” state Bureau of Securities Chief Chris Gerold said Wednesday in a statement.
“The two actions today are a reminder to investors that investing in cryptocurrencies or crypto-related products have significant risks and investors must do their diligence before investing,” he added.
But proponents of cryptocurrency argue the new system of currency is an easy way to transfer money between parties while avoiding the need to go through banks and other third-party financial institutions.
Cryptocurrencies are not issued by a central authority such as a government body, according to Investopedia, making them attractive because of their potential immunity to the ebb and flow of international and domestic politics.
Zoptax, according to Grewal’s office, sold unregistered “Zoptax Coins” to investors with the goal of raising up to $3.4 million for business ventures. The coins were not registered with the state’s Bureau of Securities, the OAG said.
In addition, Zoptax lied about how it would use the money, its assets and liabilities, who actually developed Zoptax and its coins, financial risks with Zoptax, and that the coins were not registered with the state.
Unocall, like Zoptax, also did not register with New Jersey regulators in the case of its “Staking Program” that would allow investors to buy and trade Unocall tokens, according to Grewal’s office. The site provides very little information about who works for the company, the OAG said.
Neither companies returned a request for comment.
“While not every initial coin offering or cryptocurrency-related investment is fraudulent, there are significant risks involved with these products,” Division of Consumer Affairs Acting Director Paul Rodriguez said in a statement. “Investors must be on alert and not be tempted to invest in cryptocurrency-related investments without first vigorously vetting any transaction.”
Last month, the state’s Bureau of Securities unveiled a lawsuit against Princeton-based blockchain online rental marketplace Pocketinns, Inc. and its president, Sarvajnya Mada, for selling over $400,000 in unregistered cryptocurrency to New Jersey investors, Grewal’s office said.