Linda healthcare corporation is facing a “cease and desist” scenario. Gerald Rome, the commissioner of Colorado securities issued this official order to Arturo Devesa, founder of Linda healthcare corp. As a result, the company halted its healthcare ICO (initial coin offering) because it offered the token sale as an unregistered security.
The Colorado securities authorities first recognized the Linda Health Coin (LNDA) by Linda Healthcare Corporation when it surfaced this April. Administrative Judge, Matthew Norwood reasserted a July ruling with the cease and desist order recently.
The Colorado Department of Regulatory Agencies released a public press statement regarding the same. The company stated that users could use the LNDA token to purchase Linda Health Insurance, which covers telemedicine services. This insurance uses AI-based chat services and blockchain technology to come up with creative medical solutions.
Additionally, the release reaffirms that the company failed to disclose cryptocurrency-related risks to LNDA token buyers. A pop-up stated, “This healthcare ICO constitutes a security in Colorado and can be closed and easily ignored.”
LNDA healthcare ICO jeopardizes securities offering
The company claims that the healthcare ICO was a crowdfunding campaign. But Judge Norwood dismisses the statement as an “investment contract”. The healthcare ICO is described in detail in the company’s white paper and on its website as well.
Judge Norwood further adds that LNDA token meets all the criteria for Howey test. It classifies as a security because a common enterprise creates the contract to generate profits through the efforts of a third party or promoter.
Colorado state commissioner Rome further warns the crypto investors. He states that ICOs are high-risk undertakings. Sophisticated investors must handle such opportunities with the understanding that they could lose most or all of their funds. Healthcare ICOs should serve as cautionary tales, similar to any high-risk investment ventures.
