ICOs are a way for companies to raise money selling crypto currency tokens instead of company shares. With cryptocurrencies such as Bitcoin reaching astronomical heights in value, many people are flocking to these ICO’s. Billions of dollars has been raised through ICOs. Unfortunately, many people investing in ICOs do so without knowing much about the specifics of the particular offering. A recent study by the Satis Group an ICO advisory firm found that 81% of ICOs last year were scams China has banned ICOs and the SEC is warning people to be wary of ICO scams. The Securities and Exchange Commission’s newly formed Cyber Unit brought its first charges of fraud and securities regulations violations against Dominic Lacroix and his company PlexCorps in regard to an Initial Coin Offering (ICO) in which Lacroix promised profits of 1,354% in less than a month.
As I have preached many times, you should never invest in anything unless you totally understand what you are investing in. Legendary investment guru Warren Buffet is not a believer in ICOs and views cryptocurrencies as a bubble that will eventually burst and cause investors to lose large amounts of money.
Never invest in a company unless you have researched it carefully. The SEC advises you to be particularly cautious when investing in ICOs. The SEC says to not take at face value representations of companies issuing ICOs that they are SEC-compliant.
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