The US Securities and Exchange Commission has halted a multi-million dollar digital token sale by California-based restaurant review app firm Munchee.
SEC chairman Jay Clayton said there were substantially more opportunities for fraud from initial coin offerings.
Initial coin offerings (ICOs) let startups quickly raise capital by issuing virtual tokens to investors, usually in exchange for more established crypto-currencies such as Bitcoin or Ethereum.
Munchee had been seeking to raise $15m to create an “ecosystem” where Munchee and others could buy and sell goods and services using the tokens.
These virtual coins typically use blockchain, which uses cryptography to record transactions which can then be authenticated.
