US CFTC has issued an advisory on initial coin offerings
The Commodity Futures Trading Commission (CFTC) has issued an advisory on initial coin offerings (ICOs) and crypto-asset to warn investors to exercise caution and conduct extensive research before purchasing digital coins or tokens, including those self-described as “utility coins” or “consumption coins.”
СFTC claims, that many Initial Coin Offerings end in fraud or failure. Several studies and news reports indicate that a large number of Initial Coin Offerings (ICOs) are fraudulent or the underlying products or services fail to live up to their promises. Estimates of fraud range from 5 percent to more than 80 percent of ICOs.
SEC has already warned about fake ICOs multiple times, even mentioning their own HoweyCoin ICO website, a fake ICO site created to educate users on ICOs and how to spot the false ones. The risks of investing in ICOs continue to grow, as scammers find new ways to trick people into investing. The large majority of them can even be easily recognized by promises of outsized returns, which are simply too good to be true.
СFTC noted that "digital tokens and coins can also be derivatives or commodities, depending on how they are structured." Back in 2015, the CFTC first said that it considers cryptocurrencies like bitcoin to be commodities, and today's missive indicates that some of the crypto-assets coming out in the market today could fall under the agency's purview.
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