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IEO crypto exchanges may pass under SEC magnifier

Maya Mandz | May. 16, 2019
IEO crypto exchanges may pass under SEC magnifier

May 16, 2019 | AtoZ Markets - According to the latest news from the Consensus 2019 conference in New York, the IEO crypto exchanges may pass under the U.S. SEC magnifier soon.

IEO crypto exchanges on the US SEC radar

The IEO crypto exchanges may pass under the U.S. Securities and Exchange Commission magnifier in the nearest future. During the Consensus 2019 conference in New York, the U.S. financial regulator’s representative Valerie Szczepanik shared with the audience some details regarding U.S. SEC attitude towards the IEO crypto exchanges.

According to Szczepanik exchanges may be operating as unauthorized securities dealers under U.S. securities laws if they take a fee for facilitating token sales. She noted, that  they would need to fulfill broker-dealer licensing requirements, because “are probably engaging in the broker-dealer activity.”

The US SEC official did not mention any specific exchanges. However, Binance, OKEx, Bittrex, and KuCoin have facilitated IEOs and have likely made millions of dollars in fees for such platforms.

Szczepanik called the action against TokenLot for facilitating an ICO “instructive,” and added: “In this case, there was an enforcement action, as the platform was acting as a broker-dealer and participating in the distribution with a violation of the registration provisions. ”

IEO crypto exchanges are heating records

Initial Exchange Offering emerged in 2018 as an alternative version of the popular fundraising platform, Initial Coin Offering (ICO). It is administered by a cryptocurrency exchange on behalf of a token issuer who token as a new venture creates a cryptocurrency as an asset class to raise much-needed capital. The Initial Exchange Offering (IEO) market is presently doing excellently well as the number of IEOs launched increased beyond 50 in 2019.

According to one of the ICO rating platforms, IEO market has unexpectedly experienced a mouthwatering increase in exchange offering globally. The data revealed that Exmarkets launchpad launched the highest number of IEOs (11), followed by Probit launchpad with 10 IEOs. The leading exchanges such as Binance, Bittrex, Kucoin, and Houbi were also involved with lesser number of IEOs. The experts assumed that IEO ability to outgrow ICO’s past achievements is a matter of time.

At the moment, the stage is set for the IEO gold rush. Excited investors are looking to make a quick profit; willing to invest money without understanding the fundamentals. In addition, IEO might help to make cryptocurrencies and exchanges more appealing to the global market.

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