ESMA warns investors about high risks in Initial Coin Offerings
What happened
The European Securities and Markets Authority warned investors about the high risks involved in Initial Coin Offerings (ICOs). The body noted the rapid growth of ICOs and expressed concern that investors may be unaware of the risks they take when investing in these virtual currencies. It also warned that firms issuing ICOs might operate without complying with relevant EU legislation.
From spacewar.com
Why it matters
European Securities and Markets Authority functions as the regulatory body supervising and integrating financial markets across Europe [European Securities and Markets Authority and Europe connection]. The warning highlights that ICO coin prices are typically extremely volatile. Furthermore, if these operations fall outside EU rules, investors may not benefit from legal protection if the investment fails.
From spacewar.com
Who's involved
- European Securities and Markets AuthorityEuropean Securities and Markets Authority, the independent EU body issuing the risk warning.
- EuropeEurope, the continent where the European Securities and Markets Authority supervises financial markets.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- EuropeSpeculative
The financial market in Europe could see increased compliance costs and risk perception across its sectors.
- European Central BankSpeculative
The European Central Bank may need to adjust its coordination efforts regarding crypto licensing due to increased risk.
Keep exploring
The entities involved
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European Securities and Markets Authority
agency of the European Union
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Association of Southeast Asian Nations
international organisation of Southeast Asian countries