January 17, 2020 by Victor
If 2017 was the year of the ICO, 2019 would have been that of the IEO (Initial Exchange Offering). 2019, in fact, was the spectacle of the resurgence of this type of project, conducted by the sites of crypto-exchange. But this situation does not delight to both the SEC, which has motivated him to throw a caution about the rush to this kind of project.
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Investment with huge risks
Through its department of education, Investor Education and Advocacy, the SEC reportedly urged citizens to be wary of the IEO.
According to his statement , the allegations of new technologies and financial products, such as those associated to offers of digital assets, as well as those which provide that the IEO are controlled by the trading platforms, could be used for a scam to attract investors with a false promise of high returns in a circle of investment attractive
These projects are likely to violate the federal laws on the securities and shall have one point of protection of investors with respect to offers of securities registered and exempt, she argued.
Put the ICO and IEO on the same scale
If the intervention of the SEC has been delay of about a year when the proliferation of ICO, she does not want to commit the same error on the treatment of the IEO.
It provides for this purpose to subject the IEO to the same provisions as the ICO, namely the need to register in advance with the agency before launching on the market.
In addition, it wished to clarify that it is highly recommended that these projects be consistent with the federal laws on securities :
“This is a red flag if the IEO and its participants, including the online trading platform, do not address or does not discuss the applicability of federal laws on securities” , she concluded.
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