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SEC Chairman issued Warning against Cryptocurrencies

Bitcoin fell Wednesday, dipping under the key $10,000 level after the Securities and Exchange Commission said it will require Digital currency exchanges to enlist with the organization. The announcement alluded to Digital currency that is considered as securities.

In a Recent Interview with FOX Business, Jay Clayton, Chairman of  Securities and Exchange Commission warned investors to “think long and hard” before investing in initial coin offerings. An initial coin offering is similar to an initial public offering for a company but investors buy crypto tokens or coins instead of stock.

Jay Clayton expressed his concerns in the exclusive Interview after Telegram, an encrypted messaging app company,  raised more than $850 million in the first two months of fundraising which has broken all the previous record for the biggest ICO campaign of all time.

“I worry in particular about people who see things that look like a New York Stock Exchange or NASDAQ listing for ICOs or cryptocurrencies and think that I’m getting the same protection for my token that I would be getting for a share of stock that trades on an exchange,” Clayton said. “They’re not.”

The chairman and his team are examining whether a number of ICOs are violating securities laws, telling FOX Business:  “Many ICOs and many of the ones I’ve looked at specifically are securities. … For some reason, people selling ICOs seem to think they don’t need to follow either path; they seem to think they can have the best of both worlds: a limited disclosure from a private placement and public trading and public offering of the token.”

 

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