Sweden’s financial regulator has issued a statement outlining a number of risks pertaining to ICOs. The document describes “ICO” as a “term used as the designation for launching a new token or other form of digital access based on crypto,” Bitcoin News reported.
The Financial Supervisory Authority (FSA) ICOs to “grassroots” financing activities, stating “the purpose of an ICO is to raise funding from the public to develop a business idea for a completed business, not different from grassroots financing.”
The FSA states that “most ICOs are unregulated,” and as such are “not under the supervision of authorities. FSA warns of the lack of “consumer protection’ and notes that there is “no guarantee that the token or cryptocurrency launched really gives the proprietor any kind of right or claim against the publisher.”
The FSA states that “there is usually no requirement that the price of a new digital asset is matched by a true market value,” and that the issuer “has no obligation to allow any independent party to evaluate the digital asset.”
The Swedish regulator warns that there is “no requirement that someone will buy back the digital asset” once it is distributed.
It also emphasizes the lack of “requirement for anyone launching an ICO to provide all essential information,” nor that said information is “provided to all investors at the same time.”
The FSA notes that “the recent rapid increase in both the number of ICOs and their value can attract developers who have no interest in completing any project but are just looking for money.”