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Dilendorf Law Firm represents ICO investors in the United States in pursuing damages for, or rescission of, fraudulent or otherwise unlawful virtual-token sales.
Since 2017, blockchain startups have raised more capital through token-generation events (also known as initial coin offerings, or ICOs) than from traditional venture-capital firms. Unfortunately, ICOs have proven attractive not only to legitimate FinTech businesses entering the market, but to operations seeking to defraud investors of millions of dollars.
State and federal law in the United States protect investors when purchasing securities, which include most virtual tokens sold during ICOs. Those laws not only prohibit the issuers of securities from committing fraud, but also generally require that an issuer register its securities with the government before offering or selling them to the public.
If the issuer fails to register their securities, and the offer or sale of the securities does not qualify for an exemption from registration, then investors can rescind their investments and receive their money back, regardless of whether the issuer knowingly committed fraud or unintentionally violated SEC registration requirements.