US SEC Warned Citizens To Be Cautious Against Initial Coin Offerings

By Jenny Aurora | January 16, 2020
SEC Seeks Feedback on Custody Rules for Digital Assets

The US SEC has reportedly issued a warning letter on January 15th, from its Investor Education and Advocacy, calling for extra caution from the citizens in handling IEOs-related businesses. 

“Be cautious if considering an investment in an IEO. Claims of new technologies and financial products, such as those associated with digital asset offerings, and claims that IEOs are vetted by trading platforms, can be used improperly to entice investors with the false promise of high returns in a new investment space.  As described below, IEOs may be conducted in violation of the federal securities laws and lack many of the investor protections of registered and exempt securities offerings.” the SEC notified in its statement. 

The current IEOs scene – which is experiencing a significant growth boost – is having some similarities compared to the ICO bloom 3 years ago, when an increased number of projects has utilized the benefits brought upon, when numerous crypto exchange platforms began facilitating their tokens directly on their systems. 

Binance’s launchpad has finalized a considerable flow of traffic at the beginning of last year, with numerous projects listed IEOs on the platform. 

Fetch.Ai (FET) has gathered  $6 million in a matter of 60 seconds, at the official launch of its Feb. 25th, 2019 IEO. 

After a significant upsurge in popularity 2 years ago, ICOs has been rained down heavily by the US SEC, as the agency is being more forceful in restricting the new fundraising method.

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