IOSCO, the leading standardsetting body for securities regulators, issued another warning concerning the risks of initial coin offerings. Specifically, IOSCO notes, among other things:
There are clear risks associated with these offerings. ICOs are highly speculative investments in which investors are putting their entire invested capital at risk. While some operators are providing legitimate investment opportunities to fund projects or businesses, the increased targeting of ICOs to retail investors through online distribution channels by parties often located outside an investor’s home jurisdiction — which may not be subject to regulation or may be operating illegally in violation of existing laws — 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.
The full text can be found here.
I’m not entirely sure what this adds to the regulatory debate. But the fact that IOSCO is taking the step to say something, along with noting its earlier preliminary paper, does show that there is likely a congealing global consensus that the transactions are—at least in their totality—posing increasingly undue risks to the financial system.