US investigates crowdfunding cryptos

WASHINGTON (ANP) - The US stock market watchdog SEC investigates so-called initial coin offerings (ICOs), reports The Wall Street Journal on the basis of insiders. Through ICOs, companies offer digital coins that entitle them to, for example, a product or service that is still being worked on, or a part of the future profit. It is a form of crowdfunding that is hardly supervised and abuse is lurking.

With such transactions, there is often no business model available and in many cases the promoters take off with the money. The stock market watchdog has now requested information from dozens of companies, according to the American business newspaper.

The market for ICOs last year was $ 6.5 billion. Experts believe that investments are very risky. Last year almost half of the new ICOs were flopped or the company went bankrupt.