Initial coin offerings present dangers to investors, new challenge for U.S. regulators – Reuters

NEW YORK (Thomson Reuters Regulatory Intelligence) – The explosive growth of “initial coin offerings,” a capital-raising tool that uses bitcoin and other crypto-currencies to fund projects that leverage technologies such as blockchain, has sparked concern among experts who warn that the lack of transparency around the issuance of such coins is a concern for both investors and regulators.

The Securities and Exchange Commission is said to be taking a hard look at the increased use of such offerings, with the growth of so-called ICOs surging in recent months. The overall value of the coin market is estimated at over $90 billion, and the frenzied activity has fueled a record-breaking rise in the price of bitcoin, which hit an all-time high of $2,911.86 this week, according to the CoinDesk Bitcoin Price Index (BPI)[here].

ICOs have become mired in an ongoing industry debate, with critics likening the phenomenon to the dotcom bubble in the 1990s, while proponents say the use of such coins and offerings facilitates the type of innovation that could radically transform existing business processes and industries.

Source: Initial coin offerings present dangers to investors, new challenge for U.S. regulators – Reuters

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