The VDFR issued a cease and desist order to LevelNet, of Irving, California, "for violations relating to the Vermont Uniform Securities Act" and ordered it to stop advertising and selling in the state.
The regulator said that LevelNet is conducting an initial coin ofering (ICO) seeking to raise money from investors across the country in exchange for their newly created cryptocurrency.
LevelNet is accused of violating Vermont law by "deceptively advertising unfounded and unrealistic investment returns and failing to properly register the investment".
This move is part of "Operation Cryptosweep", a series of enforcement actions by state regulators co-ordinated by the North American Securities Administrators Association to crack down on fraudulent cryptocurrency-related investment schemes.