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Article snippet: A new approach to fundraising by startups that uses digital currencies like bitcoin is sparking concern among lawmakers and regulators, and calls for tougher rules. At issue are initial coin offerings, where new companies or smaller projects seek to crowdfund — or raise investment funds from the public — through crypto online currencies. While many of these offerings are well-intentioned, others are scams and some have weak security making them susceptible to hacks. That's led to growing calls for new regulations to protect investors and consumers. The Securities and Exchange Commission is already taking notice. The agency on Tuesday made public an investigation it conducted on digital coins sold by "The DAO" — an online leaderless group that used a cryptocurrency called Ethereum." Hackers targeted the group in May of last year after one of the highest-profile initial coin offerings. That attack destroyed the group and the value of its coins, leading many to lose money. In its report, the SEC concluded that the coins offered by DAO were securities — publicly tradable debt like bonds. And the agency said U.S. securities laws may apply to the tokens. “Foundational principles of the securities laws apply to virtual organizations or capital raising entities making use of distributed ledger technology,” the SEC wrote. The agency said DAO users were investing money in the coin offerings with the expectation of making profits. The SEC held that because DAO tokens were ... Link to the full article to read more