The Risk and Regulatory Measures of ICO

The Risk and Regulatory Measures of ICO

Call it the quest to make profits, or be a part of the revolution in the financial markets, the phenomenal growth in the number of ICO participants have been on the rise. The attention that the cryptocurrency world is witnessing now has been long due from their perspective; crowdfunding and pre-sale concepts are embedded in the offerings of tokens against the ownership and product/services of the platform are important elements in the offer. One may wonder why all this for mere generation of tokens, or an event to secure digital rights, well only then will the entire world be aware of how much technical advancement is necessary.

The funding for the further research, community awareness, management of the business and operational excellence become key elements. There can always be a question on the investors about the ICO, Is it safe to invest heavily on something that is totally encrypted and digital? That is why it is important to weigh down the opportunities entirely and purchase the coins prudently. The consumer protection in the ICO is questionable, as

  • no formal audits or project feasibility is guaranteed, there are numerous cases of the ICO being abandoned after a lot of money is raised through the crowdfunding
  • smart contracts include the condition today about how the risk of the project being dropped midway as a clause, there is very well the limited scope of technical flaws in the white paper that is a blueprint of the offerings to the public
  • the fundamental method of valuing a token could change and investing with a hope to have higher valuation may not work the way as planned
  • as the resale value is the main basis for the ICO, there is no economic utility aspect, hence that could be a risk that contributors have to bear
  • the markets again are crazy, the highly volatile and sometimes too fluctuating crypto markets will leave the currency exhausted and burn out without a trace, be aware and track them while trading through the BTC Profit trading platform online

There multiple ways were the market could be spooned or front run, using manipulative techniques, with very less regulation there could be a lot of laundering and false promotion of the anonymous token selling activities. There is no mandatory KYC Compliance that ICO issuers have to follow, hence a lot of ambiguity could set in seeing the past ICO history, invest only when there are surplus funds and a loss that can be borne by the investor.

    Vanessa Chambers