ICOs Are "Like Investing in a Casino in Exchange for Poker Chips"
- “Cryptocurrencies and ICOs are extremely risky investments and are likely to become the next wave of internet fraud.”
The financial regulator of the Canadian province of New Brunswick, the Financial and Consumer Services Commission, has issued a warning to local residents about investing in Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term and initial coin offerings (ICOs).
“With initial coin offerings, there are no controls on how the money invested in them will be used,” said Jake van der Laan, the commission’s director of enforcement and chief information officer. “The investor receives tokens in Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term for their investment, but those tokens may only have value inside the proposed project. It is like investing in the construction of a casino in exchange for poker chips. But those poker chips are only worth something if the casino is built.”
The commission advises people to avoid investing in a company if they do not fully understand the business or how their investment will make money.
“Cryptocurrencies and initial coin offerings are extremely risky investments and are likely to become the next wave of internet fraud,” added van der Laan. “Fraudsters often try to use the lure of new and emerging technologies to convince potential victims to invest money in their scams.”
Echoing previous regulatory warnings around the world, the FCSC says that cryptocurrencies have no inherent or underlying value, and their price is being pushed up by speculators. They added that the instruments are not endorsed or regulated by a central authority and, because of the anonymous nature of their transactions, are vulnerable to money laundering.
Another concern expressed by the provincial body is that "once an investor’s money leaves Canada, it is hard, if not impossible, to get it back."
The financial regulator of the Canadian province of New Brunswick, the Financial and Consumer Services Commission, has issued a warning to local residents about investing in Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term and initial coin offerings (ICOs).
“With initial coin offerings, there are no controls on how the money invested in them will be used,” said Jake van der Laan, the commission’s director of enforcement and chief information officer. “The investor receives tokens in Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term for their investment, but those tokens may only have value inside the proposed project. It is like investing in the construction of a casino in exchange for poker chips. But those poker chips are only worth something if the casino is built.”
The commission advises people to avoid investing in a company if they do not fully understand the business or how their investment will make money.
“Cryptocurrencies and initial coin offerings are extremely risky investments and are likely to become the next wave of internet fraud,” added van der Laan. “Fraudsters often try to use the lure of new and emerging technologies to convince potential victims to invest money in their scams.”
Echoing previous regulatory warnings around the world, the FCSC says that cryptocurrencies have no inherent or underlying value, and their price is being pushed up by speculators. They added that the instruments are not endorsed or regulated by a central authority and, because of the anonymous nature of their transactions, are vulnerable to money laundering.
Another concern expressed by the provincial body is that "once an investor’s money leaves Canada, it is hard, if not impossible, to get it back."