- A warning has just been sent out by the United States Securities and Exchange Commission (SEC) from its Investor Education and Advocacy arm.
- The warning is telling people to be more and more wary about initial Exchange offerings (IEOs).
A warning has just been sent out by the United States Securities and Exchange Commission (SEC) from its Investor Education and Advocacy arm, which is telling people to be more and more wary about initial Exchange offerings (IEOs).
Writing in the statement published yesterday the commission said:
“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.”
When the ICOs took off like a rocket in 2017, people went crazy for the industry. In 2019, the IEO scene was making waves with more and more projects cropping up and making the most of the different crypto platforms to launch their own tokens directly on the platforms.
The ICO backlash from the SEC at the end of 2018 was a massive change in dynamics for the industry.
The SEC went onto say:
“The past few years have seen opportunistic fraudsters take advantage of the quickly evolving investment space around digital assets, “cryptocurrencies” and ICOs to conduct fraudulent schemes. The development of IEOs provides a similar opportunity for fraudsters. Investors should be careful.”
It will be interesting to see how this plays out. For more news on this and other crypto updates, keep it with CryptoDaily!