Initial Coin Offerings: Know the risks before you buy

Financial Industry Regulatory Authority press release August 31, 2017 ------ The Financial Industry Regulatory Authority (FINRA) issued an Investor Alert warning investors about the potential risks of participating in initial coin offerings, commonly referred to as ICOs. An ICO involves the creation and distribution of virtual coins or tokens by a company to raise capital. ICOs differ from initial public offerings (IPOs) of stocks. ICOs typically confer no ownership rights in the company and, unlike bonds, ICOs do not involve investors lending money to the issuer. Depending on the circumstances of each ICO, the virtual coins or tokens offered and sold to investors may be securities. If so, the offer and sale of these tokens are subject to the federal securities laws, according to a recent Investor Bulletin issued by the Securities and Exchange Commission (SEC). To learn more click on the picture below to read the release.