ESMA Sends ICO Warning

Buying into initial coin offerings (ICOs) can lead to the total loss of an investment, said the head of a top European regulator.ICOs bear similarities to initial public offerings for a stock, but in an IPO, the investor usually has a stake in the company, whereas coin sales differ widely in terms of acquired rights. That’s been a primary criticism of ICOs, but differences in regulation are also important factors for investors to consider, according to Steven Maijoor, the chair of the European Securities and Markets Authority.”You don’t have the regular protection that regulated investments offer, and can lose all of your investments,” Maijoor said Tuesday. “As a European securities market authority, we have warned, in November, about the so-called ICOs because while ICOs in principle can give you services in return for the coin that you buy, or a share in the revenue, this happens in a very unregulated space.”

Source: ESMA: Cryptocurrency ICOs can result in loss of your investments – CNBC

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.