Initial Coin Offerings (ICOs) are everywhere in the unregulated cryptocurrency space and have already proven themselves to be an incredibly effective means of crowdfunding projects with digital currency. Sometimes, however, ICOs are little more than fraudulent scams aiming to liberate investors from their hard-earned Ethereum (ETH). Because of this, the U.S. Securities and Exchange Commission has provided a list of ‘Things You Need to Know About ICOs.”
ICOs May Be Securities
First and foremost, the SEC wants investors to know that Initial Coin Offerings are — in many cases — securities. As such, these specific ICOs must operate under the rule of federal securities laws or risk invoking the SEC’s wrath. Notes the regulatory body:
ICOs, based on specific facts, may be securities offerings, and fall under the SEC’s jurisdiction of enforcing federal securities laws.
Some ICOs Need to Register
Those ICOs which do qualify as securities must, therefore, legally register with the SEC — whether they want to or not. Explains the SEC:
ICOs that are securities most likely need to be registered with the SEC or fall under an exemption to registration.
If It Looks Like a Token and Smells Like …
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