A digital asset trading platform (aka – “virtual currency exchanges” or just “exchanges”) is an entity (or person) that exchanges virtual currency for fiat currency, funds, or other forms of virtual currency. Digital asset trading platforms typically charge fees for their services. Aftermarket trading of digital assets may also occur on so called, “exchanges.” These exchanges may not be registered securities exchanges or alternative trading systems regulated under the federal securities laws. Accordingly, digital asset purchasers and sellers may not have the same protections that would apply in the case of securities listed on an exchange.
If helpful, here are some basic concepts that you should educate yourself on before considering contributing capital to an initial coin offering, token sale or related offering:
- What is an initial coin offering (ICO)?
- What is a blockchain?
- What is a digital asset, coin, or token?
- Who can issue digital assets, coins, or tokens?
- Things to consider when determining whether to contribute capital to an ICO (or related offering)
To better understand the risks associated with digital asset or virtual currency trading, here’s more information.