Adena Friedman, head of Nasdaq, believes that users need to be careful when buying tokens. She said that ICO projects are used to deceive investors at the Future of Fintech conference in New York.
The head of a major US stock exchange believes that ICO projects bear serious risks for individual investors because the digital money industry lacks regulation, transparency and accountability.
In her opinion, investors are in the zone of greatest risk. Companies conducting ICO‘s are just taking away people's money without providing any data, Friedman has said. In her opinion, in the area of greatest risk are the beginning investors. Companies “can just willy-nilly take people's money” without providing any information, Friedman is sure.
"In ICO space none of that is available, and it's all being bought by retail. ...I have real concern on lack of transparency, oversight, and accountability that these companies have as they're going out to raise capital through an ICO." — head of Nasdaq said.
Friedman also touched on the issue of regulating the crypto sector. She explained that the Securities and Exchange Commission (SEC) requires companies to provide detailed information during the IPO’s. However, this rule does not apply to ICO projects. Therefore, the head of Nasdaq stressed that she shares the SEC's point of view regarding the recognition of ICO’s as being securities.
Earlier the head of the SEC, Jay Clayton, said the organisation would not review the definition of a security. Companies that raise funds through sales of digital tokens should not think that the government would treat them differently than firms participating in traditional securities market. Therefore ICO’s will most likely be treated as securities while cryptocurrencies are not.
By Ekaterina Ulyanova