Sage-Tips

Are initial exchange offerings legal in the US?

IEOs may be offered by offshore entities or persons seeking to avoid application of federal securities laws. However, the Alert notes that IEOs conducted on offshore trading platforms may still be subject to the federal securities laws if they are offered to persons in the United States.

Who can launch cryptocurrency?

Entrepreneurs looking to launch a new cryptocurrency can do it through an initial coin offering (ICO), a variation on an initial public offering (IPO). There is little to no government regulation of ICOs currently, and anyone can launch one, provided they get the technology put in place.

Is cryptocurrency a security?

If the Cryptocurrency is determined to be an investment contract, and therefore a security, it is subject to SEC regulation and must either be registered or be subject to an exemption from registration.

How can I participate in IEO?

Usually, you will need to complete the KYC and AML verification processes. Once you complete them, it’s time to check the cryptocurrencies you can use to contribute to the IEO. You can then top up your account with the coin which is accepted in the crowd sale and wait until the IEO begins to start buying your tokens.

What is an initial exchange offering (IEO)?

What Is An Initial Exchange Offering (IEO)? An Initial Exchange Offering (IEO) is a token sale supervised by a cryptocurrency exchange. IEOs are available exclusively to the exchange’s users, although some IEOs may take place in several exchanges.

What is an ICO (Initial Coin Offering)?

IEOs are similar to initial coin offerings ( ICOs) in that they are initial offerings of digital assets ( e.g ., coins or tokens) to raise capital.

Are online trading platforms due to due diligence in IEOS?

These online trading platforms, which are typically not registered with the SEC and which may improperly refer to themselves as “exchanges,” may also claim to perform due diligence or other quality assessments of the IEOs. Be cautious if considering an investment in an IEO.

Does an online trading platform need to register with the SEC?

In addition, if the IEO involves securities, the online trading platform on which the IEO is being offered may need to register with the SEC separately as a national securities exchange or operate pursuant to an exemption, such as an alternative trading system (ATS).