The SEC warned about the risks of investing in IEO

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The SEC warned about the risks of investing in IEO

The US Securities and Exchange Commission (SEC) believes that many initial public offerings (IEOs) are held in violation of federal securities laws. The agency warned investors about the high risks associated with participation in such campaigns.

The SEC emphasized that unregulated exchanges cannot provide the proper level of protection for investors.

To conduct IEO in the United States, a marketplace must register itself as a national stock exchange or alternative trading system (ATS) if the coin offered on it is a security. Also, such exchanges may need a broker-dealer license.

The SEC warned that they did not issue a single permit to conduct IEO. Investors were encouraged to monitor the availability of necessary licenses if a foreign platform offers coins to US residents.