The SEC issued a warning about investing in companies promising
to raise capital by selling cryptocurrencies such as Bitcoin and
Ethereum. The agency told investors to be wary of buying stock in
companies that tout "initial coin offerings," sales of
units of valuable currencies run through electronic ledger systems.
The warning reflects the agency's increasing attention to
cryptocurrency trading. A series of ICO scams and cybersecurity
vulnerabilities prompted the SEC to take a closer look at
cryptocurrency trading. In a July report, the agency told investors
that ICOs could be considered securities trades under federal law,
meaning companies would have to register most sales with the
SEC.
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