The United States Securities and Exchange Commission, on their official website, recently put the spotlight on Initial Coin Offerings (ICOs). The post seemed to draw attention to the general public about what ICOs are and how they might be exploited and easily used for manipulation and for fraud.

The SEC acknowledged that even though many organizations use these ICOs as a resourceful means for running financial transactions, a lot of others might not be so noble in their quest.

The opening paragraph of the statement reads:

“Companies and individuals are increasingly considering initial coin offerings (ICOs) as a way to raise capital or participate in investment opportunities. While these digital assets and the technology behind them may present a new and efficient means for carrying out financial transactions, they also bring increased risk of fraud and manipulation because the markets for these assets are less regulated than traditional capital markets.”

The same page on the website explained ICOs a bit but seemed to be a tad more focused on the possibility of exploitation and manipulation. However, there is some explanation about how investors may go about investing and about what market professionals really need to know about the offerings.

Generally, the SEC advises all organizations and individuals alike to proceed with caution when making the decision to invest in offerings, warning that if a promoter guarantee returns, if an opportunity sounds too good to be true, or if you are pressured to act quickly, please exercise extreme caution and be aware of the risk that your investment may be lost.

Potential investors are also advised to be deliberate about understanding how the product is being transacted or traded by the platforms that do so. The SEC cautions that

“many platforms for trading digital assets refer to themselves as ‘exchanges’, which can give the mis-interpretation to investors that they are regulated or meet the regulatory standards of a national securities exchange.”

The general public is advised to take caution.

Similar to Notcoin - Blum - Airdrops In 2024

origin »

170 +