Is this the next financial scandal waiting to happen?
A growing number of tech companies are raising funds by issuing their own digital currencies for investors to buy. But the practice is completely unregulated. Is another financial scandal just around the corner?
Sean Boulanger, a senior community manager at a Cape Town digital agency, doesn't consider himself a serious investor.
But he came across US tech company Civic, run by fellow South African entrepreneur Vinny Lingham. It was planning to raise money in a way Mr Boulanger had never heard of before.
Instead of issuing shares and floating all or part of the company on the stock market - known as an initial public offering or IPO - Civic decided to issue its own tokens, or digital currency, to help fund the identity verification platform it was developing.
"There are already stories of fraudsters capitalising on this somewhat irrational exuberance over ICOs," says Gray Sasser of US law firm Frost Brown Todd, a blockchain specialist.
He believes that regulation is inevitable. Indeed, the SEC recently suggested ICOs should be registered in the same way as conventional investments.
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