The United States Securities and Exchange Commission (SEC) has now issued its own warning on cryptocurrencies and Initial Coin Offerings (ICOs) albeit has taken a tone friendlier than the Reserve Bank of India. The SEC told investors that no ICOs have been registered with the financial regulator and that it has not approved for listing and trading any exchange-traded products (such as ETFs) holding cryptocurrencies or other assets related to cryptocurrencies. An ICO is the cryptocurrency analogy for the Initial Public Offering. In an ICO investors get virtual coins or tokens instead of a share in a company or fund. The funds in a token are used to mine various cryptocurrencies like Bitcoin, DASH, Ethereum, Monero, Litecoin, Z-cash, and others. The funds can also be used to invest in other blockchain companies and ventures. "As with any other type of potential investment, if a promoter guarantees returns, if an opportunity sounds too good to be true, or if you are pressured to act quickly, please exercise extreme caution and be aware of the risk that your investment may be lost," the SEC said. However, SEC chairman Jay Clayton say that ICOs can be effective ways for entrepreneurs and others to raise funding, including for innovative projects. "However, any such activity that involves an offering of securities must be accompanied by the important disclosures, processes and other investor protections that our securities laws require. A change in the structure of a securities offering does not change the fundamental point that when a security is being…
