Today the European Securities and Market Authority (“ESMA”) issued two statements on initial coin offerings.
In terms of investors, the ESMA identified the following key risks that must be taken into account by investors: (i) risk of losing the capital invested; (ii) risk of dramatic fluctuations in coin (token) prices and unclear exit strategy; (iii) risk of fraud and ML; (iv) risk that investor protection falls outside the scope of EU laws and regulations.
For firms involved in the ICOs perspective, careful consideration must be given as to whether their activities establish regulated activities. The ESMA briefly identifies regulations that may apply for the ICOS.
More information can be found here.