It’s no secret that ICOs have been the hot topic this year when it comes to cryptocurrencies and regulations. So much so that the SEC have added a separate section of their website dedicated to ICOs.
What is an ICO?
ICO stands for Initial Coin Offering. It is similar to an IPO (Initial Public Offering) where investors purchase shares of a company. ICOs are used in cryptocurrency and is a mechanism new projects use to raise funds. Typically new projects sell their own crypto tokens in exchange for Bitcoin and Ethereum.
What is the SEC?
The SEC is the U.S. Securities and Exchange Commission, an independent agency of the US federal government. The SEC’s primary responsibility is to enforce the federal securities laws and regulate stock and options exchanges.
The ICO section on the SEC.gov/ICO website acts as an educational resource with topics like 5 Things To Know About ICOs for investors as well as information for companies who use ICOs to fund their projects. The SEC’s site states they are providing information about the three ‘R’s of ICOs: Risk, Reward, and Responsibilities.
The new ICO informational portion of the official sec.gov website is where all official updates are to be posted so investors can stay on top of any new regulation changes as well as fraudulent activities to be cautious of in the market.
The addition of the ICO section provides legitimacy for ICOs as they are not out-ruled as illegal or scams. Late last year there was uncertainty if US residents would be allowed to participate in ICOs at all. It seems the ICO space is welcomed by the SEC and government, so long as regulatory conditions are met.