ICOs are risky, German and Dutch regulators think

Chinese experience of banning ICOs has been universally recognized as a measure too strict. However, this does not mean that initial coin offerings (a mechanism of investment attraction when a company issues cryptocurrency-based digital tokens) are flawless in their nature.

Vitalik Buterin, one of the founders of the Ethereum, was always against the current ICOs, telling it’s too centralized for decentralized cryptocurrency sphere and too unreliable. Europeran regulators seem to have come to similar conclusions.

ESMA, the European Securities and Markets Authorities, now states that ICOs can often contain frauds and money laundering. German BaFin, or the Federal Financial Supervisory Authority, is also warning of substantial investment risks after tokens acquisition. And the Netherland Authority for Financial Markets (AFM) also tells about risky initial coin offerings which often turn out to be scam schemes. Promises of suspiciously high returns often indicate it’s this kind of scheme and not a good investment.