The myth of making money is being targeted! SEC is going to bring the hottest digital currency issuance ICO under supervision

The U.S. Securities and Exchange Commission (SEC) said they have regulatory authority over ICOs, the most popular digital currency issuance.

ICO, the full name of which is Initial Coin Offering, is very similar in meaning to IPO. Both refer to raising funds by issuing something. The only difference is that IPO issues its own securities, but ICO issues electronic currency (tokens).

The SEC said companies that raise money by selling digital assets must comply with U.S. federal securities laws. Issuers must register their transactions with the government, as do digital currency exchanges.

The media quoted an analysis saying that people have been waiting for some kind of regulatory signal, which is the most detailed regulatory direction of the SEC at present, stipulating how digital currencies and exchanges should be integrated into the financial market. This means that basic consumer protection principles still apply, and sometimes these technology geeks don't know that they are playing with fire.

In ICO, investors can use virtual currency to invest in early products or projects. These usable virtual currencies may be Bitcoin, Ethereum, etc.

After completing the investment, the project party will usually distribute other tokens to investors in proportion. The value of other tokens will change accordingly with the development of the project, and the tokens obtained by investors participating in ICO can often be rewarded through secondary market transactions or dividends.

In recent years, ICO has been developing in full swing, and its financing speed is even beyond the reach of IPO.

Gong Ming, founder of Blockchain Pencil and ICOAGE, said at an event recently that "not long ago, a blockchain company Inchain completed a 20 million RMB financing through ICO in just 22 hours, while another blockchain startup called Gnosis sold all its tokens in just 9 minutes."

The latest research report from financial research institution Autonomous shows that since the beginning of this year, emerging technology companies have raised nearly US$1.3 billion through ICOs, while the total financing scale in 2016 only exceeded US$200 million.

However, ICO financing also has certain risks. In 2015, the US blockchain project The DAO raised $150 million, which shocked the world, but soon failed due to hacker attacks.