ICO Warning Issued By The International Organization of Securities Commissions

Announcements, ICO News, News | January 22, 2018 By:

The International Organization of Securities Commissions (IOSCO) has issued a warning on initial coin offerings (ICO).

The warning stated that ICOs are highly speculative investments in which investors are putting their entire invested capital at risk. IOSCO said that while some operators are providing legitimate investment opportunities, the increased targeting of ICOs to retail investors through online distribution channels by parties often located outside an investor’s country raises investor protection concerns.

“There have also been instances of fraud, and as a result, investors are reminded to be very careful in deciding whether to invest in ICOs,” IOSCO said.

IOSCO is an association of organizations that regulate the world’s securities and futures markets. Members are typically the Securities Commission or the main financial regulator from each country. The organization’s role is to assist its members to promote high standards of regulation and act as a forum for national regulators to co-operate with each other and other international organizations. IOSCO is structured into a number of committees that meet several times per year at different locations around the world and it has a permanent secretariat based in Madrid.

In its meeting in October of last year, IOSCO discussed the growing usage of ICOs to raise capital as an area of concern. Following this meeting, IOSCO issued a statement to its members regarding the risks of ICOs and referenced various approaches to ICOs taken by members and other regulatory bodies.

The IOSCO Board has also established an ICO Consultation Network through which members can discuss their experiences and bring their concerns, including any cross-border issues, to the attention of fellow regulators.