What has happened?
The Dutch financial regulator, the Netherlands Authority for Financial Markets (AFM) has warned investors about the risks of initial coin offerings (ICOs).
What does this mean?
The regulator published a statement, outlining the risks surrounding investing in ICOs and cryptocurrency.
AFM Chairman Merel van Vroonhoven said that there is great promise shown by blockchain for services applications but there is also high risk of scams and loss of investments in ICOs.
"Although the AFM sees the possibilities of blockchain technology for financial services, it points to the high risks of ICOs in the current hype. The high risk of scams and loss of intake combined with the hype around ICOs at the moment is a dangerous cocktail."
The regulator enumerated a list of risks investors should be wary about, including the lack of transparency of ICO organisers, fraud, deception and the risk of price manipulation.
This warning is the latest from a growing chorus of concern from various national and pan-European regulators, from Germany, the UK, Singapore, Sweden or the European Securities and Markets Authority.
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