SEC Warns Crypto Investors Initial Exchange Offerings Could Be Securities Like Some ICO's

On Tuesday, the US Securities and Exchange Commission (SEC) released a warning on initial exchange offerings (IEOs).

As the notice says, IEOs are pretty much the same as initial coin offerings (ICOs). However, the agency has investigated many to be unregistered securities offerings, especially in the last few years. Whereas providers of IEOs say their sales differ from ICOs, they still may be in violation of the federal securities laws, SEC mentions. For this reason, the agency has told investors to be very careful if they’re thinking about investing in IEOs. This is what the notice says exactly:

“IEOs are being touted as an innovation on ICOs because they are offered directly by online trading platforms on behalf of companies – usually for a fee – to provide immediate trading opportunities for the digital assets.”

Crypto Exchanges Aren’t Typically Registered with the SEC

SEC also says in the note that crypto exchanges aren’t typically registered with the agency, so they improperly call themselves exchanges. It warned that platforms may say they’re registered, but this doesn’t mean they actually are, not to mention IEO’s approved by the SEC don’t exist. It continued with:

“It is common for a fraudster to make false and misleading statements or exaggerated claims about regulatory approvals and oversight to lure potential investors. It pays to independently investigate these claims for yourself.”

According to the agency, investing in an IEO conducted by an offshore trading platform is risky because companies that decide to run their business offshore usually attempt to avoid regulations. More than this, it can be difficult to discover important information about them.

IEO Investors Using Offshore Platforms Won’t Find Legal Remedies in US Courts

The note mentions in the end that US courts can’t offer legal remedies to investors who use offshore trading platforms to be issued IEOs. While cases may be won in courts, US judgment can’t be collected against companies, entities or persons that operate in foreign countries, so the laws in those countries are the one to be applied.

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Oana Ularu
Oana Ularu
Curious about what’s going on with all the money in the world, Oana is bringing you the latest news in the crypto world. She’s aware of the fact that you need to know everything that’s happening on the financial scene in order to play the cryptocurrency market, so you can count on her to share with you every little detail on what matters.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


Please enter your comment!
Please enter your name here


Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

Deregulating Bitcoin May Increase Speculative Trading Instead of Technical Innovation: Japan’s New Top Financial Regulator

Ryozo Himino, the new top financial regulator of Japan, wants the country to take caution over promoting digital assets, arguing that instead of promoting...

Goldman Sachs New Digital Asset Manager Reveals Plans to Bring A ‘Digital Token' to the Bank

U.S. financial giant Goldman Sachs is pushing forward its plans to launch a digital asset with the appointment of its new digital asset...

Grayscale Ethereum Trust Files with SEC to Halve the ETHE Locking Period Same as GBTC

Grayscale Investments has publicly filed a registration statement on Form 10 with the US Securities and Exchange Commission (SEC) on behalf of its Ethereum...

Florida Teenager Behind the Infamous Crypto Twitter Hack Pleads Not Guilty to 30 Counts of Fraud

Graham Ivan Clark, the 17-year old Florida teenager accused of being the main culprit of the most significant privacy breach in Twitter’s history, has...

Bitmain’s Management Feud Is Finally Affecting Business Operations; AntMiners Shipments Delayed

Bitmain’s top-level struggles cause a three-month delay in Antminer hardware. Two mutually exclusive solutions offered to customers. The constant wrangling within the largest Bitcoin...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today