The regulator's announcement was made earlier this week.

Wall Street's main watchdog has said that initial coin offerings (ICOs), unregulated means of crowdfunding for new crypto-currency ventures, should be subject to the same regulations as traditional securities sales. 

ICOs have gained momentum in recent years as digital currency entrepreneurs increasingly use them to raise millions quickly by creating and selling digital tokens with no regulatory oversight. 

But the US Securities and Exchange Commission has said that the tokens can be considered securities, and consequently may need to be registered unless a valid exemption applies. 

"The innovative technology behind these virtual transactions does not exempt securities offerings and trading platforms from the regulatory framework designed to protect investors and the integrity of the markets," said Stephanie Avakian, co-director of the SEC's enforcement division. 

Avakian's announcement delivers a sharp prod to the side of crypto-currency start-ups, reminding them that they cannot ignore investor protection rules and in future may have to be more cautious about fundraising through coin sales in the US. 

By mid-July this year, technology firms had raised around $1.1 billion through 89 coin sales, roughly 10 times more than that in the whole of 2016, according to Reuters.

There are 110 upcoming ICOs still to come this year, according to tokendat.io, an online token sales tracker. Some ICOs have faced criticism as they failed to accurately disclose token distribution, such as what proportion of tokens would be help by founders.

Because many tokens are listed and traded on crypto-currency exchanges, large holders could gain more price-controlling powers.