The US Securities & Exchange Commission (SEC) have released an official ICO (Initial Coin Offering) guide on its website
With so many ICO scams making headlines, the SEC are looking to avoid this and ensure companies who ICO are legitimate and people who invest are protected
The website highlights 5 things you need to know about an ICO:
ICO’s can be securities falling under SEC law
ICO’s that are securities must be registered
To be aware that ‘Tokens’ sold in an ICO can be called many things
ICO’s carry substantial risks
To ask questions before making any investments
The guidelines also includes what an investor should specifically look for when looking to invest in an ICO – ensure you do your research, the investment is sound, understand how the product is traded etc.
The final section looks at what market professionals need to know about an ICO – to be cautious when promoting an ICO, to protect investors, to know when a exchange needs to be registered etc.
For more information, view the full guidelines here.