Financial Regulator of Germany Called ICO “A Speculative Form of Investment”

The Federal Office of Financial Supervision of Germany (BaFin) called the original offer of coins (ICO) “ICOs are a highly speculative form of investment.
Investors should therefore be prepared for the possibility of losing their investment completely.
As is the case with most new trends, the high level of public interest in ICOs is also attracting fraudsters. ” and warned investors about the risks involved in participating in it.
The financial regulator urged investors to be cautious about these risks and be prepared for a complete loss of money.
A high level of public interest in ICO also attracts scammers, the statement said.
The obvious similarity between the terms “original proposal” and “initial public offer IPO” creates the false impression that ICO is comparable to the issue of shares, the management noted.
However, they do not correspond either from a legal or a technical point of view.
According to BaFin, the main risks associated with participation in the ICO are significant fluctuations in the prices of tokens, the absence of a secondary market, the difficulty of evaluating the project’s prospects for a technically untrained investor, the insufficient or deliberately false information declared by the issuer, the lack of protection of personal data.
The regulator highlighted the “systemic vulnerability of ICOs to fraud, money laundering and terrorist financing” which could lead to authorities taking action “against operators or other persons or enterprises that are involved in such illegal dealings.”
The Office did not announce any measures for the regulation of the ICO and promised to publish a new statement on November 15 with more detailed information.
“Before any consumer decides to participate in the ICO, he must make sure he fully understands the benefits and risks of the project or investments,” warned BaFin investors.
Recall that in many countries, including the United States, Britain, Malaysia, Gibraltar, Russia and Dubai, regulators issued similar statements. And the authorities of China, South Korea and El Salvador banned the ICO.

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