The first part of the guide describes five things about ICO’s that investors need to know. The first and the most important point illustrated is that ICO’s can be Security Offerings. Most ICO’s claim that they are utility tokens but regardless of what they claim they might be securities if they pass the Howey test which is a system used to determine whether an asset is a security.
The guide also warns the investors to be careful as many ICO’s have turned out to be scams. The last point urges the investors to question everything before investing.
Next, the guide elaborates 4 points in detail:
Lastly, the guide gives some guidelines to market professionals who are conducting such ICO’s
Some ICO’s have outright promised specific returns to their investors which could potentially land them in a difficult position later and the SEC urges to use caution before promoting these coins and the way they are marketed.
The guide urges that the ICO’s have to keep in mind the investors before taking decisions and are responsible to protect the investors. If it is a platform which for trading digital assets then they have to be registered with the SEC.
The Chairman of the SEC recently had commented on an interview on CNBC that Cryptocurrencies like Bitcoin which are alternatives to the traditional currencies like the USD, Yen, Euro are not securities but most of the ICO’s are in fact securities as they pass the definition of a security. He also commented that the definition of a security will not be changed.
SEC News Tweeted:
The SEC had also previously come up with a spoof website which even had a whitepaper (and some hilarious design). The website intends to educate investors about fraudulent ICO’s. Many ICO’s are raising Millions of dollars just with a whitepaper and even fake team members. Some ICO’s have even absconded after raising the money.
SEC Also tweeted:
Discuss this news on our Telegram Community. Subscribe to us on Google news and do follow us on Twitter @Blockmanity
Did you like the news you just read? Please leave a feedback to help us serve you better
Disclaimer: Blockmanity is a news portal and does not provide any financial advice. Blockmanity's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do your own due diligence before making any investment. Blockmanity won't be responsible for any loss of funds.
Circle of Games (COG)—Web3's multi-gaming platform has raised a $1mn round from Nazara, with participation…
Unconference Bali 2024, Asia’s premier Web3 event, is poised to take center stage against the…
Tradeleaf, a leading FinTech company empowering global trade through digital solutions, recently celebrated a significant…
Foundership Global Accelerator, a prominent force in the Web3 & Emerging-Tech Community boasting over 10,000…
April 16, 2024 - Condo, the world's first real-world asset (RWA) meme token, was recently…
The Partisia Blockchain Foundation, at the forefront of crafting privacy-enhancing and interoperable blockchain platforms, today…