Paragon bills itself as “revolutionizing all things cannabis with blockchain.” True to that mission, forget your U.S. dollars or euros. To pay rent, hire in-house legal aid or buy a doughnut at the Paragon commissary, you must use the company’s digital coins. “If we could raise at least $60 million, it would be good enough to build one or two work spaces,” VerSteeg said, referring to its ParagonSpace co-working spaces. “We’re a tech company with a real estate side to it.”

Before creating ParagonCoin with her husband, Russian entrepreneur Egor Lavrov, she founded pot delivery service AuBox, which brought medical marijuana products to patients’ homes. She won the Miss Iowa United States competition in 2014.

“It’s good to have these regulations because there’s so much going on,” said VerSteeg, who added the SEC hasn’t been in touch with her company. Scammers engaged in pump-and-dump schemes related to ICOs need to be stopped, she said. “Regulation will weed out some of that.”

The Game

ParagonCoin promoter The Game is far from the only celebrity to endorse an ICO. Former championship boxer Floyd Mayweather promoted Stox, a digital coin linked to a prediction market. Paris Hilton, the celebrity famous for being famous, used her Twitter feed on Sept. 3 to promote LydianCoin, a digital token that says it’s linked to the “first A.I. big data marketing cloud for blockchain.”

Almost from their inception, ICOs have been ripe for abuse. As much as 10 percent of the money investors have given this year to ICOs was instead stolen through phishing scams, in which thieves convince people to send money to Internet addresses that aren’t in fact linked to digital token offerings, according to a study by Chainalysis, a blockchain transaction verification company based in New York.

The SEC warned individual investors on Aug. 28 of the risks in buying the tokens, cautioning that scammers are using the new fad to lure investors into old manipulation schemes such as penny-stock pump-and-dump scams. Other governments are paying attention too. China’s central bank said Sept. 4 that ICOs are illegal.

Secret Country

For the moment, ICOs are largely a buyer-beware market, with many issuers cloaked in secrecy. ExioCoin, which had raised less than $500 as of Sept. 12, claimed it had won the backing of a sovereign nation, which it didn’t name, and said it couldn’t disclose the identities of the development team “in order to preserve the integrity of the Foundation and the Exio principles.”

The LinkedIn profiles of Exio co-founders Marcus Knight and Sunny Johnson, which said they graduated from Oxford University, have recently been deleted. The school said it has no record of either having completed a degree in the subjects they listed, which include astrophysics or theoretical and mathematical physics. Knight said he was a trader at both Goldman Sachs Group Inc. and BlackRock Inc. Both companies said no one by that name worked there during the years Knight listed on his page.