The International Organization of Securities Commissions (IOSCO) has published a board communication on concerns relating to initial coin offerings (ICOs). At a meeting held on 18 and 19 October 2017, the IOSCO Board discussed the growing usage of ICOs to raise capital as an area of concern. IOSCO notes that there are clear risks associated with these offerings. ICOs are highly speculative investments in which investors are putting their entire invested capital at risk. While some operators are providing legitimate investment opportunities to fund projects or businesses, the increased targeting of ICOs to retail investors through online distribution channels and parties often located outside an investor’s home jurisdiction, raises investor protection concerns. There have also been instances of fraud, and a result, investors are reminded to be very careful in deciding whether to invest in ICOs.

View IOSCO Board communication on concerns about ICOs, 18 January 2018