SEC warned investors about the dangers of participating in IEO

The US Securities and Exchange Commission (SEC) has issued a warning to investors regarding participation ininitial public offerings (IEO).

The SEC reported that IEOs are very similar to Initial Token Offers (ICOs), which, from the point of view of the regulator, are often an unregistered offer of securities.

Although exchanges conducting IEO claim thatstock offers are not at all the same as ICOs, they can violate US laws. Therefore, the SEC warned that investors should be careful when participating in IEO.

“IEO is presented as an innovation compared toICOs, since they are conducted directly by trading platforms on behalf of companies, and for a commission. An advantage is called that you can start trading the assets received almost immediately, ”said the SEC.

The Commission emphasized that usually cryptocurrencyexchanges are not registered with the SEC and can sometimes “illegally call themselves exchanges”. The regulator also noted that at the moment not a single IEO has been registered.

A study of the BitMEX cryptocurrency derivatives exchange conducted at the end of last year showed that most of the tokens displayed on IEO lost in price more than 80%.

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