Encrypted messaging app Telegram has already raised such a mind-boggling amount of cash from private investors that it's scrapping its plans to carry out a broader initial coin offering available to the public, per The Wall Street Journal.
Tagged With initial coin offerings
Hey, remember initial coin offerings, the almost totally unregulated form of investment vehicle in which investors trade real cash or assets in exchange for virtual "tokens" in cryptocurrency-backed startups? You know, that hot new crypto market that the Wolf of Wall Street, Jordan Belfort, warned everyone was rife with scams? Those very ICOs that the Securities and Exchange Commission told everyone to be very careful about because of the "greater opportunities for fraud and manipulation"?
In the past few months, a number of companies have whispered the word "blockchain" and seen their stock prices explode, including a Hooters franchise owner, an iced tea company, and a biotech firm whose CEO promptly sold off around $1.1 million in stock. So hey look! Camera manufacturer Kodak is now crypto!
After months of tension over what, if anything, the US Securities and Exchange Commission was planning to do about cryptocurrencies and the billions of dollars people have sunk into initial coin offerings - a form of barely regulated investment vehicle in which investors trade real cash for tokens in crypto-backed startups - the agency's chairman Jay Clayton has finally weighed in.
The US Securities and Exchange Commission launched a new cyber fraud unit earlier this year amid the internet's ongoing Bitcoin boom, seemingly telegraphing its intent to crack down on a cryptocurrency market rife with hacking, fraud and scams. The first thing on its agenda was likely always going to be initial coin offerings - a form of almost totally unregulated investment vehicle in which investors trade things of real value, such as cash, in exchange for stakes in cryptocurrency-backed startups.
A few weeks ago, Jordan Belfort - the notorious "Wolf of Wall Street" and convicted financial scam artist - warned the entire internet not to get into sketchy cryptocurrency-backed startups. Specifically, he warned that initial coin offerings, a form of almost completely unregulated investment vehicle where crypto-backed startups offer blockchain-based "tokens" in exchange for things of real value like cash, were the "biggest scam ever, such a huge gigantic scam that's going to blow up in so many people's faces".
A hustler knows a hustle. So if you have ever considered sinking money into an initial coin offering -- a complicated, barely regulated, and booming new form of financial vehicle where startups offer investors stakes in "new" cryptocurrencies rather than traditional stock -- it might be a good idea to listen to what one of finance's most notorious criminals-turned-authors has to say.