Regulations and scams the top two concerns around ICOs
When it comes to Initial Coin Offerings or ICOs, peoples main concerns by far are how the field will be regulated and scams within the field, according to a survey among the 400 attendees to the ICO Event Amsterdam on Wednesday.
According to Lars van de Ven of the Dutch authority on financial markets AFM's FinTech department, the most logical thing to do at this time, is to let the ICO field self regulate. In this way, the industry can guarantee that ICOs will continue into the future in a more sustainable way, he said to NL Times.
The AFM previously warned Dutch investors to be careful of ICOs as they are vulnerable to fraud and scams. Van de Ven added to NL Times that a large part of ICOs - including utility tokens, for example - currently doesn't fall under the AFM's mandate. "Our supervision is defined by law. The ICOs that do fall within the scope of our mandate will be followed closely. If they do something illegal, we can fine them. If they don't, we won't." he said. "If we see too many scams, regulators will be forced to step in and will kill it."
"At the moment the risk of ICOs seem greater than the benefits", Van de Ven said during his presentation at the ICO Event Amsterdam. According to him, the market is susceptible to emotion and deception because there is a lack of transparency and a lack of investor protection.
Van de Ven called for the industry to better self regulate against money laundering and funding of terrorist groups. He is worried about the fact that there is no clear knowledge about how much money laundering is going on in ICOs and cryptocurrency exchanges. He added that ICOs must formulate and enforce higher standards and leverage the strengths of blockchain technology.
The authority also offered to check companies' planned an ICOs for potential regulatory issues. "At the moment, if companies approach us we will ask them how they are structuring their ICO, and we urge them to work towards a responsible ICO." Van de Ven said to NL Times before his presentation.
Speaking to NL Times in the days running up to the ICO Event Amsterdam, other speakers Emanuele Francioni, founder of Web 3 Ventures, and Edan Yago, CEO and founder of Epiphyte, also called for ICOs to be allowed to self regulate.