IOSCO warned members about the risks associated with Initial Coin Offerings ("ICOs").
ICOs involve the sale of digital coins or tokens created using distributed ledger technology (e.g., blockchain) and sold to investors in exchange for a cryptocurrency (e.g., Bitcoin) or fiat currency (e.g., USD). IOSCO explained that ICOs are speculative and often not standardized or regulated, and present various risks. IOSCO also asserted that investors should proceed with caution when considering potential ICO-related investments, given the uncertain legal status and frequency of fraudulent activity associated with the ICOs.
IOSCO directed investors to a collection of communications published by regulators from various jurisdictions regarding ICO risks.
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