Sweden Issue Statement on ICO

Finansinspektionen (FI), the financial regulatory body of Sweden, released a statement on November 7, 2017 regarding the high increase in crowdfunding methods occurring through ICOs.

The fundraising practice is described by FI with similarity to the grassroots campaigns. FI also provided information regarding token issue in exchange for other cryptocurrencies. Five specific guidelines were given by FI to upcoming investors.

1) FI warns token offerings to be unregulated and “therefore not under the supervision of FI or other authorities and there is no consumer protection.” Since tokens are not guaranteed, the token holder or proprietor cannot claim against the issuer or publisher.

2) FI emphasizes market valuation. It states, “There is usually no requirement that the price for which a new digital asset is sold is matched by a real market value. The publisher also has no obligation to allow any independent party to evaluate the digital asset.”

3) FI states that access to a secondary market cannot be guaranteed. To increase value of token, no secondary market requires an over-the-counter or peer-to-peer means of trade which is susceptible to risks.

4) FI stresses that it is not required for entities planning to engage in offerings to disclose key information to all investors simultaneously. This can lead to unfair marketing by the party issuing tokens.

5) FI warns about outright fraud. Some of the entities may provide money without intending to generate a product or service or deliver any value to the investors.

The financial regulatory body of Sweden hopes the new investors to learn about the mentioned points before purchasing tokens during a crowdfunding event so as to avoid malicious attacks and raise awareness.

LEAVE A REPLY

Please enter your comment!
Please enter your name here