The SEC has issued an alert to investors regarding initial exchange offerings. This warning is not an official statement on regulatory policy, but it does indicate the way the American market regulators view the practice and why many exchanges are shunning U.S. investors.

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SEC Warns Investors About IEOs

The U.S. Securities and Exchange Commission’s Office of Investor Education and Advocacy has urged investors to use caution before investing in initial exchange offerings. The alert explains that IEOs are similar to initial coin offerings in that they are offerings of digital assets to raise capital, but touted as an innovation over ICOs because they are offered directly by trading platforms. The online platforms may also claim to perform due diligence or other quality assessments of the IEOs.

“Be cautious if considering an investment in an IEO,” the SEC warned. “Claims of new technologies and financial products, such as those associated with digital asset…

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Source: https://news.bitcoin.com/sec-issues-alert-against-initial-exchange-offerings/