The U.S. Securities and Exchange Commission is investigating the sale structures of dozens of ICOs that were completed in 2017, according to a report released yesterday by the Wall Street Journal.

The Journal, which reported that the SEC has “issued dozens of subpoenas and information requests to technology companies and advisors involved in the red-hot market for cryptocurrencies,” notes that the probe surrounds the sale structure and pre-sale model of ICOs.

These pre-sales are not subject to the same rules as public offerings (a factor which contributed to their attractiveness to investors in the first place), and the SEC’s inquiry comes after several others from the commission as it tries to determine whether ICOs, which use cryptocurrency tokens to raise funds for companies, violate existing securities law.

Earlier this year, SEC chairman Jay Clayton instructed staff to be on “high alert” when it comes to coin offerings that may be violating these laws. Its probe on presales concerns the way companies offer discounts or other incentives to drive the sale forward, according to yesterday’s reports.

Over $6 billion was raised by ICOs in 2017, and about $1 billion has already been raised by the method in 2018, TechCrunch reported today.

Read more at the WSJ and TechCrunch.

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