The U.S. Securities and Exchange Commission has published its first warning against initial exchange offerings Tuesday.
According to the notice, the regulator considers IEOs to be similar to initial coin offerings, many of which the agency has been investigating as unregistered securities offerings for the past several years.
While IEO providers may claim their sales are different from ICOs, they may still violate federal securities laws, the SEC said.
The agency warned investors to "Be cautious" if they are considering investing in an IEO."IEOs are being touted as an innovation on ICOs because they are offered directly by online trading platforms on behalf of companies - usually for a fee - to provide immediate trading opportunities for the digital assets," the notice said.
The SEC took aim at crypto exchanges directly, noting they "Are typically not registered with the SEC" and "May improperly refer to themselves as 'exchanges.'".
The SEC warned a platform saying it is registered does not necessarily mean it is actually registered with the agency, and it emphasized that "There is no such thing as an SEC-approved IEO.".
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies.
CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
SEC Warns Crypto Investors of Initial Exchange Offerings in New Note
Published on Jan 14, 2020
by Coindesk | Published on Coinage
Coinage
Recent News
View All
Blockchain Bites: Bitcoin's Run, Uniswap's Hemorrhaging Value, Anchorage's Banking Bid
Bitcoin is nearing all-time highs in price and market cap last set three years ago.
Japan's megabanks to lead experiment with digital yen
We have, in order, Cheese Bank with a $3.3 million theft, Akropolis with its $2 million loss, Value DeFi with a whopping $6 million exploit and finally Origin Protocol's loss of $7 million.
Number of new Bitcoin addresses spikes amid growing FOMO
Japan's three largest banks, as part of a group of 30 private sector actors, are set to collaborate on an experiment with a digital yen.
Not just Wall Street: Quant trader explains why Bitcoin price is going up
Sam Trabucco, a quantitative trader at Alameda Research, believes four general factors are pushing up the price of Bitcoin.