Swedish financial authorities have provided guidelines on chip-based crowdfunding.
On November 7, 2017, the Swedish financial regulator Finansinspektionen (FI) issued a statement on the abrupt increase in crowdfunding facilitated through chip generation events, commonly called ICO.
The FI described this fundraising practice as something similar to grassroots community campaigns (grassroots campaigns) and provided details on issuing chips in exchange for other established cryptocurrencies, such as Ether. This body presented five specific guidelines for potential investors.
First, the FI points out that the majority of chip offers are not regulated and "therefore, are not under the supervision of FI or other authorities and there is no consumer protection". Affirms that the "owner" or owner of the file has no claim right against the issuer or "bidder", since the chips are not necessarily guaranteed.
Second, the FI addresses market valuation. It states: "In general, it is not necessary that the price at which a new digital asset is sold corresponds to a real market value. The bidder also has no obligation to allow any independent party to evaluate the digital asset. "
In third place is the question of access to a secondary market, which, he said, is not guaranteed either. The lack of a secondary market means that, to accumulate value in a chip, one must find a means of trading over the counter or between pairs, which carries risks.
Fourth, the FI emphasizes that there are generally no requirements that require entities that intend to participate in offers to provide key information (specifically with respect to what is offered) or that the information is disclosed to all parties. Investors at the same time. The FI states that this could lead to unfair negotiation by the issuer of the chips.
The fifth and final warning of the IF is about flat and plain fraud: entities can raise money without the intention of fulfilling the obligations of creating a product or service, or of delivering some value to investors.
Before investors buy chips issued during a crowdfunding event, the FI expects to be informed about the five points mentioned above, to increase self-awareness and avoid being victims of malicious behavior.
Source: ETHNews