The risks in an ICO can be as much as the benefits in engaging in it. Given that the market does not have enough governance and regulatory system yet, investors can lose their investments if any case of fraudulent occurs or if there’s a failure in the project. It is not a hard to come by occurrence.
Although market observers and detectors have included ICOs on their radar. In the year 2017, in July, the Securities and Exchange Commission of the United States mentioned that they might use the laws of federal securities to scrutinize some ICOs. In September 2017, China stopped the operations of ICOs, though not permanently, but until they are regulated. The EU on another hand, propose to give ICOs guidelines for regulations in this year 2018.
At the moment, the market is not yet wholly regulated but it is growing and selling pretty well. However, critics argue that cryptocurrency is a bubble that will burst any time soon, therefore, before you invest, check and balance the risk attached to it closely. It is quite common for the team behind an ICO to cart away with investors money – “Wild, Wild West”.
Consider Avoiding An ICO If…
– The identity of the team is not disclosed and they run fake social media accounts.
– It is not professionally backed with good content and does not show some form of experience from the team.
– It is void of any legal backing.
– It is void of working concept or model to illustrate ideas.
– It does not have a concise and achievable whitepaper and business schedule or if it’s void of analytic review and well described account of their market and those they are competing with.
– There is no particular delivery criteria or any documented account on how investors will get their money when they invest.
This is just a guide for starters to know the risks involved when investing in an ICO and possible drawbacks. However, this is not all you need to know, engage in personal research to learn more and be fully oriented on the risks involved. Because we will not be responsible for any setbacks you have while taking an investment decision.