The SEC's Office of Investor Education and Advocacy has issued an alert to investors, warning them about potential scams with companies claiming to be involved with ICOs; according to the report, fraudsters may use new technology such as ICOs to defraud customers in various ways; discusses recent trading suspensions, pump-and-dump, market manipulations and tips for investors. Source
National Internet Finance Association (NIFA) of China on August 30 released ICOs risk alerts; the Association highlights two kinds of risks: 1) some projects raise money in the name of ICO with misguided publicity and this may lead to illegal fundraising; 2) the assets of some ICO projects remain unclear and the information disclosure is far from sufficient. Source (Chinese)
The market for initial coin offerings (ICOs) has seen quite the rise in 2017 as investors have been pouring billions into blockchain based startups; these large fundraisings have been done without any real regulatory oversight until recently; in July the Securities and Exchange Commission issued a report stating that the offering by the company DAO was a securities offering; Chinese regulators issued statements over the past few months stating their intention to look at the market and this past weekend they deemed ICOs illegal in China; while companies have been able to secure vast amounts of capital there has also been increased cases of theft and fraud; the coming regulatory wave is sure to change how market participants act. Source
Its platform focused on funding from fans for internet celebrities on YouTube, Twitch and other live streaming platforms; in August it raised 119.5 ether which is about $47,000; the SEC notified Protostarr of its investigation however a final status has not been reported; the firm says forming a legal department to manage the ICO investigation and potential need for registration is not within its short-term plans and it will refund its ICO investors. Source
In the FT’s big read they take an in-depth look at the boom of initial coin offerings (ICOs) and the potential bubble they are causing; ICOs have thus far raised over $1.8bn worldwide and have shown no signs of slowing; the bigger question is will international financial regulators clamp down to kill the market or provide it more structure. Source
ICOINFO, one of China's largest ICO exchange platforms, announces the suspension of new project launches, awaiting relevant regulatory rules; users will not be able to add value to their accounts during the suspension. Source
Podcast talks with former SEC Enforcement Division attorney Nick Morgan; Nick Morgan says the SEC is reviewing all types of cases and using the Howey Test to determine whether the deals are considered an offering of securities; explains that the Howey Test considers whether the expectation of profit relies on efforts of investors and also says that the investigations center around whether the investors are passively investing or actively involved in creating value; Morgan also noted that the SEC's resources are limited given the vast number of ICOs being offered and reports that the investigations will likely focus first on any fraudulent activity with potential investigation efforts also on exchanges that encompass the inclusion of many ICOs. Source
Chinese authorities on Monday ordered a ban on initial coin offerings (ICOs); a PBoC statement ordered that ICO activities should be halted starting from Monday, and ICO platforms should not engage in exchange services between fiat currencies, virtual coins and tokens; two of China's leading ICO platforms, ICOAGE and ICOINFO, had already halted services before the official statement came out. Source
Hong Kong financial regulator, the Securities and Futures Commission (SFC), has announced that tokens issued via initial coin offerings (ICOs) may be classified as securities; the classification may extend beyond ICOs into digital asset exchanges dealing in the tokens. Source
Business Insider highlights the recent news of China clamping down on ICOs and the digital currency exchanges; notes that mining has not affected by the recent changes and shares that while there will be pressure on the market that this marks the beginning of a highly regulated market. Source