NEW YORK (Reuters) - The U.S. Securities and Exchange Commission is investigating Overstock.com Inc's OSTK.O sale of cryptocurrency to investors, the online retailer said in a filing on Thursday, sending it shares lower by as much as 10 percent.

The seal of the U.S. Securities and Exchange Commission hangs on the wall at SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst

Overstock said it would cooperate with the SEC and was responding to the agency’s request for documents.

Overstock also said in the filing that it had concluded an initial coin offering (ICO) pre-sale after raising $100 million, and it had initiated a subsequent fundraising round.

It announced the ICO launch in October last year and said at the time the offering would be legally compliant with SEC rules using an instrument called the Simple Agreement for Future Tokens.

In midday trading, Overstock shares were down 4.4 percent at $57.85.

Overstock said the SEC investigation did not mean that the SEC had concluded that anyone had violated the law or that the SEC had “a negative opinion of any person, entity, or security.”

On Wednesday, the Wall Street Journal reported that the SEC had issued dozens of subpoenas aimed at ICOs, a strategy of raising funds in cryptocurrencies, in a broad investigation of the multi-billion dollar cryptocurrency industry.

The SEC declined to comment on the Wall Street Journal article.

SEC Chairman Jay Clayton, appearing before the Senate Banking Committee last month, said he may ask Congress to pass legislation to improve oversight of virtual currencies such as bitcoin amid concerns about the risks posed by the emerging asset class.

Clayton repeated that public offerings comprising digital tokens are securities and subject to the same investor protection rules as equity market offerings.

The February hearing followed a rout in the price of bitcoin, which has lost about half its value since the start of the year on concerns ranging from a global regulatory clampdown to a ban by some banks on using credit cards to buy bitcoin.

“I hope it will scare scammers and fraudsters,” George Giaglis, a professor at the University of Nicosia in Cyprus and an adviser to ICOs outside the United States, said of the SEC investigation.

He added that SEC-determined compliance would make ICOs more expensive. “But investors will feel more secure. So hopefully this would create a more mature market,” he said.

ICOs raised about $5.5 billion dollars last year, from just $200 million in 2016. The total market capitalization for the more than 1,500 cryptocurrencies that trade on digital asset exchanges has reached nearly half a trillion dollars so far this year.