S.E.C. Issues Warning on Initial Coin Offerings
Most companies selling virtual currencies in recent months have done so with little regulatory oversight
and have not made any effort to comply with securities laws, which, among other things, requires companies to disclose information about their operations before collecting money from American investors.
By NATHANIEL POPPERJULY 25, 2017
The Securities and Exchange Commission took its first steps to rein in start-ups
that have raised money by selling their own virtual currencies, a growing trend known as initial coin offerings.
Since the beginning of the year, start-ups and entrepreneurs have raised more than $1 billion
by selling custom-made virtual currencies to investors in initial coin offerings.
The agency said on Tuesday that it had concluded after an internal investigation
that at least some virtual currencies being sold to investors should be categorized as securities and needed to follow federal securities laws.
