SC warns of 'token sale' scam
Ibrahim Sani
September 7, 2017 12:06 MYT
September 7, 2017 12:06 MYT
The SC warns the public that investments involving initial coin offerings, initial token offerings, token pre-sale, token crowd-sale, or simply ICO schemes must be treated with caution.
In the continued effort to alert the public on more financial scams, the Securities Commission Malaysia (SC) has cautioned the public to be careful of the emergence of digital token based fundraising activities.
The SC warns the public that investments involving “initial coin offerings”, “initial token offerings”, “token pre-sale”, “token crowd-sale”, or simply – ICO schemes – must be treated with caution.
The SC says that ICO scheme operators typically raise funds through the issuance and sale of digital tokens, in exchange for investors paying for these tokens through virtual currencies, such as Bitcoin or Ethereum.
The SC explains that while all ICO scheme operators seek to raise funds from investors, these schemes can be structured in many forms, which may include direct investments in projects (with an aim to enable token holders to participate in a share of the returns from the projects); Seeking funding through Foundations (where investors are not entitled to seek any returns on their investments); Issuance of tokens (which entitle the investors to enjoy rights to a future product).
The inability to verify these ‘operators’ would mean that the purpose of them seeking public funds can be deemed as questionable. The SC elaborates that scheme operators may not have presence in Malaysia and it would be difficult to verify the authenticity of the scheme and the recovery of invested monies may be subject to foreign laws or regulations.
#Bitcoin
#Ethereum
#fundraising activities
#ICO schemes
#SC
#Securities Commission Malaysia
#token scam