Isolated regulators have been issuing warnings over ICOs in recent months but now it seems like an international consensus is building.
First France and Germany announced they would be launching a joint proposal at the next G20 meeting on how cryptocurrencies might be regulated.
Now the International Organisation of Securities Commissions (IOSC) is making its feelings known, and when it comes to ICOs it is not mincing its words. “There are clear risks associated with these offerings”, they say, and “investors are putting their entire invested capital at risk” in these “highly speculative investments.”
International Organisation of Securities Commissions
IOSCO is a multinational body bringing together security regulators from around the world.
Based in Madrid it says it “develops, implements and promotes adherence to internationally recognised standards for securities regulation” to set the tone for international regulation. The IOSCO board is composed of member countries from each of the major financial markets including Hong Kong, the UK, USA and China.
Of particular concern to the IOSCO is the marketing of ICOs across borders. While they accept that some offerings provide “legitimate investment opportunities to fund projects or businesses,” they fear that online selling of such risky assets creates problems, especially when the transaction crosses borders.
In general, it is hard to protect investors when they are domiciled in a different country and fall under a different regulatory jurisdiction from the ICO iself.
How best to deal with this cross-border investment is an open question. The IOSCO has started an “ICO Consultation Network” where its members can share experiences and best practices with other regulators.
For investors and ICOs wanting to check the position of their own regulator, the IOSCO has gathered together all its members’ ICO statements here.