Companies and individuals are considering the initial coin offering (ICO) as a way to raise capital or participate in investment opportunities.
Although these digital assets and technology behind them can present a new and efficient means to make financial transactions, they also increase the risk of fraud and manipulation as markets for these assets are less regulated than traditional capital markets.
Five things to know about ICO :-
ICO securities may be offered
ICOs may be offered, securities based on specific facts, and falls into the SECโs jurisdiction of implementing federal securities laws.
They may need to register
The securities ICOs that are likely required to be registered with SEC or fall under registration discount.
Tokens sold in ICO can be called many things
ICO, or more specifically tokens, can be called by various names, but only tokens called utility tokens or structuring it in order to provide some utility does not prevent tokens from being protected.
ICOs can pose adequate risk
While some ICOs may be an attempt to honest investment opportunities, there may be many frauds, which can separate you from your hard earnings with guaranteed returns and promises of future luck. They can also present sufficient risk for loss or manipulation including hacking, after which no resort for victims remain.
Ask questions before investing
If you choose to invest in these products, please ask questions and ask for clear answers. What should investors know?
So, what do Investors need to know about ICO before investing?
Start with some basic research at Investor.gov and pay attention to the following:
- Products can be sold and traded internationally.
- Research your financial professional.
- If an investment seems great to be true, be cautious.
- Understand how the product is traded. What are market professionals necessary to know?
- Take caution before promoting the offer and selling coins.
- SEC protects investors and expects you.
The SEC Advises Investors to take an Informed Decision before Investing in any ICO
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