Dutch Regulator: ICO Environment Is a ‘Dangerous Cocktail’

Regulators have issued a new warning to investors in the Netherlands about putting money into initial coin offerings (ICOs).

The Netherlands Authority for Financial Markets (AFM) – the country’s equivalent to the U.S. Securities and Exchange Commission – published a statement today outlining the risks it sees in the market for new cryptocurrencies, including those issued through the blockchain funding model.

Merel van Vroonhoven, chairman of the AFM, said in a statement:

“Although the AFM sees the possibilities of blockchain technology for financial services, it points to the high risks of ICOs in the current hype. The high risk of scams and loss of intake combined with the hype around ICOs at the moment is a dangerous cocktail.”

The regulator went on to enumerate a number of possible concerns for investors, including a lack of transparency into some ICO organizers. AFM also warned investors to be wary of promises of high returns, as well as the risk of price manipulation in token markets that have low levels of trade velocity…

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