CRYTOCURRECNY : Say, The Word Students Society's proposed great honor Lark Lights will need to follow the registration and licensing requirements for broker dealers, alternative trading systems, or national securities exchanges. And if they're not, they're going to be in hot water, Szczepanik said

NEW YORK : Initial exchange offerings [IEOs] have been the latest darlings in raising funds for cryptocurrency projects, but intensifying regulatory scrutiny and investors concerns about the viability of the companies raising capital are flashing red flags.

The emergence of IEOs - which sidestep banks and venture capital firms as a way to generate capital for new companies - is emblematic of a market which has long been trying to break free from  regulations itself.

Their launch as well as Facebook's plan to create its own digital currency, or token, have received interest in a market that slumped last year and amidst intense regulatory focus.

Already Facebook is facing scrutiny from the US Congress on the launch of the social networking company's white paper on its digital currency Libra.

IEOs, which take place on exchanges, are a spin-off of initial coin offerings [ICOs], which grew in popularity in 2016 and raised nearly $30 billion since their inception three years ago.

ICOs, though, slowed sharply this year amid a regulatory crackdown on fraudulent and illegal offerings led by US Securities Exchange Commission.

''I don't expect IEOs to result in better outcomes,'' said Peter Van Valkenburgh, director of research at at advocacy group Coin Center in Washington. ''From a regulatory and legal standpoint, there's not going to be much difference here.''

''Calling it now an IEO is not going to change your obligation to the potential issuer of that token, if the token fits the test for a security, which I think in many cases it will.''

Much like the last three years, the SEC has not changed its tune on digital currency offerings, no matter what they're called.

At least month's Consensus conference in New York, Valerie Szczepanik, SEC's senior adviser for  digital assets and innovation, said IEOs could be problematic in the United States if US exchanges are acting as broker-dealers, but not registered as such. [Reuters]

The Honor and Serving of the latest Global Operational Research on Crypto, Present and Future,  continues.


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