SEC Chairman Jay Clayton said so-called initial coin offerings in many cases looked like securities, raising the prospect the agency will take a more aggressive stance to this red-hot fundraising method. “I have yet to see an ICO that doesn’t have a sufficient number of hallmarks of a security,” Mr. Clayton said in an unscripted remark.
An initial coin offering is a method of capital raising among cryptocurrency-related startups that has exploded in popularity this year. In an ICO, firms simply create and offer a new token to investors. The process can be as simple as adding a few lines of code to an existing project.