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 of which the company’s healthcare ICO (initial coin offering) is halted. The token sale was offered as an unregistered security.
The Linda Health Coin (LNDA) by Linda Healthcare Corporation surfaced and got recognized first by the Colorado securities 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. It said that LNDA token was circulated to purchase Linda Health Insurance that covers telemedicine. This insurance uses AI-based chat services and blockchain technology to come up with creative medical solutions.
Additionally, the release also reaffirms that the LNDA token buyers were not disclosed with the details of risks in cryptocurrency. “This healthcare ICO constitutes a security in Colorado state can be closed and easily ignored” stated a pop-up.
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 is a security which is basically a contract created by a common enterprise for reaping profits by a third party or promoter efforts.
Colorado state commissioner Rome further warns the crypto investors. He states that ICOs are high-risk undertakings. And must be dealt by sophisticated investors with an understanding that they might lose most or all of their funds. Such investment opportunities auctioned through healthcare ICO must be viewed as a cautionary tale, equivalent to any high-risk investment venture.