SEC Warns About MicroCap Initial Coin Offering (ICO) Scams


SEC Warns About MicroCap Initial Coin Offering (ICO) Scams

On Monday, the SEC warned investors about potential scams involving stock of companies claiming to be related to, or asserting they are engaging in, Initial Coin Offerings (or ICOs).

The warning comes on the heels of the trading suspension of First Bitcoin Capital Corp. (OTC: BITCF), a “publicly-traded cryptocurrency and blockchain-centered company” that’s stock price was up over 6,000% in 2017.

The SEC recently issued several trading suspensions on the common stock of certain OTC issuers who made claims regarding their investments in ICOs or touted coin/token related news. In addition to First Bitcoin Capital Corp., CIAO Group, Strategic Global, and Sunshine Capital also had their stocks’ suspended by the SEC.

The SEC shared five tips for investors to avoid ICO microcap scams;

  • Always research a company before buying its stock, especially following a trading suspension.
  • Know the risks of trading “non-reporting” companies.
  • Investors should also do their own research and be aware that information from online blogs, social networking sites, and even a company’s own website may be inaccurate and potentially intentionally misleading.
  • Be especially cautious regarding stock promotions, including related to new technologies such as ICOs.
  • Look for common warning signs of possible microcap fraud.


This investor bulletin for ICO related stocks is similar to 2014 SEC bulletins about Ebola-related companies and marijuana-related companies.



Learn more HERE.



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