ICOs, the initial coin offering sales which have become incredibly popular in the past year as a means of fundraising for new tech startups with links to the digital currency world, have drawn attention from all corners of the globe. In some cases, this attention has been negative, as China recently moved to ban ICOs and analysts continue to worry about the prospect of theft, fraud, and illicit activity taking place in the ICO space. On the whole, though, the attention lavished upon the initial coin offerings craze has been wildly positive, with celebrities and other recognizable names even getting involved in greater numbers of late. Floyd Mayweather, Paris Hilton, and others have all taken to sharing recommendations of ICOs. Now, Jamie Foxx has become one of the latest celebrities to speak out on behalf of one of these token sales.
Foxx Promotes Cobinhood
Jamie Foxx, an Academy Award-winning actor and musician, recently posted on Twitter to promote the token sale of a company named Cobinhood. Cobinhood is being portrayed as a zero-fee cryptocurrency exchange. As of last week, according to Coin Desk, the ICO for Cobinhood had already generated more than $5 million in funds raised, with the final number likely to be higher. Cobinhood's fundraising efforts have been substantial, but they still represent just a small portion of the total ICO funds raised. As of late September of 2017, ICOs globally have earned their corresponding companies over $1.8 billion, showing that the new fundraising model seems to have a great degree of momentum.
Potential Issues With the SEC
Fortune has pointed out that celebrities who become entangled in the ICO craze could potentially be putting themselves in jeopardy with the SEC, depending upon the nature and aims of the companies with which they align themselves. "Obscure companies with little more than a white paper are springing up and raising millions of dollars on the Internet...the question is whether these offerings are legal - and whether celebrities...face trouble if they're not," the report suggested. The SEC, for its part, has reportedly already been paying close attention to the possible legal issues that ICOs face. A warning from the governing agency earlier in the summer cautioned that digital tokens sold in a particular ICO in 2016 were actually classified as securities, meaning that they should have been registered with the agency. In August, the SEC moved to freeze shares of four companies that had potentially used ICOs as a means of enacting pump-and-dump schemes.
None of this is to say that Foxx necessarily made any wrong moves in his endorsement of Cobinhood. It is just to acknowledge that the ICO territory, while lucrative, is still murky in some important ways.