Document on ICO regulation announced in Germany

German financial regulator, the Federal Financial Supervisory Authority (BaFin), has published a warning for investors connected to ICOs. It specifies risks related to that investment method.

According to the document, posted on the official website of the Authority on November 9, the ICO field is attracting many fraudsters now. Moreover, authors note the speculative nature of the ICO notion (Initial Coin Offering), as it resembles the IPO term (Initial Public Offering). However, experts believe that those two investment types do not correlate “neither from legal nor technical standpoint”.
Further, authors of the document list the main risks for investors related to ICOs. They include volatility, the lack of protection for investors, complexity of objective assessment of the project, the lack of data protection, and intentionally false data provided by initiators of ICOs. BaFin experts also mention that digital currencies can be involved in terrorism and money laundering.

Authors of the document note that the German government has means to fight against unfair ICOs. The document does not name those means though. However, BaFin informs that more information on the regulation of the crowdsales market will be published on November 15.

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