NASAA and state regulators are pleading with Congress once more to maintain the “investment contract” requirements for cryptocurrency. Apparently, “just wing it” is still a popular business model. Regulators opened 345 investigations into unregistered firms this year, plus nearly 1,000 into unregistered individuals because nothing screams investor confidence like someone running a hedge fund out of a Gmail account.
According to NASAA, the usual suspects are back: shady “private placement” hustlers, crypto cowboys, and pop-up financial gurus promising “institutional-grade returns” with no actual institution in sight. Most forgot one small step, to register, of course. Why would you register when you think you’re not going to get caught. Before Grandma’s retirement savings are YOLOed into a “tokenized opportunity,” state authorities are collaborating with the SEC and FINRA to find these individuals. The outcome? A new golden era of cease-and-desist orders and subpoenas. Setting up shop in “reg-light” jurisdictions, where oversight is optional and business plans fit on a cocktail napkin, some companies are even engaging in jurisdiction hopscotch. However, the hammer is about to fall, Hard. It serves as a reminder to legitimate businesses that compliance is mandatory and that it is the cost of avoiding being caught in the act. The secret code for investors is to check that the “advisor” has not yet received their LinkedIn verification badge before sending a cheque.
Because in 2025, ignorance isn’t bliss. It’s probable cause.
Unregistered Firms Under Fire: Because Who Needs Rules Anyway?
