The Dutch institutions The Nederlandsche Bank (The Dutch National Bank) and the Authority of Financial Markets (the Dutch equivalent of the SEC) have issued warnings against Cryptocurrency.
The Dutch authorities are advising consumers not to invest in cryptocurrency. The disapproval is mainly aimed at ICO's, the AFM (authority of Financial Markets) feels that the unregulated ICO's make consumers vulnerable to deception and fraud.
The timing of the Dutch warning may sound odd because crypto has been around for awhile now. But it has everything to do with the growing popularity of the digital coins. More and more consumers are investing in cryptocurrency. The AFM feels that the hype surrounding cryptocurrency and non existing regulation is a dangerous mix.
There is an increasing amount of attention in the media for cryptocurrency and the AFM thinks that a lot of consumers will be suckered into bad investments.
The Nederlandsche Bank also warns banks and businesses not to get involved with cryptocurrency because they risk getting involved with money laundering and other fraudulent practices. The European Securities and Markets Authority has also voiced its concerns about the risks involved with cryptocurrency.
There is some truth surrounding the concerns of the Dutch.The ICO's are unregulated and there is a risk that you can lose your money.
But let's get real here, there is always some kind of risk when investing in a crowd funding scheme. There are numerous crowdfunding/kickstarter projects funded with fiat money where people have seen their cash go up in smoke.
It is kinda ironic that Dutch Banker Scheringa has joined ICO Headstart, a project that is focused on solving these ICO issues.
Fraud and deception things that are also commonplace with conventional currency and the same goes for money laundering. And let's not forget the crash of 2007, how many unsuspecting investors lost their money, homes, jobs when that went down?
The concerns for caution when investing are warranted but this goes for all crowdfunding or investments in general and nobody seems able to stop that trend.
I understand for institutions like the SEC that an unregulated currency is probably the most vile and evil thing ever. I mean, regulation is what they are all about and here comes a currency that they can not control. Must be tough to get to grips with something like that.
I also understand that they have issued a warning, even more I think that it is a good thing that they are warning consumers to be careful. When investing one should always take care and make sure that you are not buying into some fraudulent pyramid scheme.
However, I do not agree with their misguided information about cryptocurrency. Instead they should get their facts straight and if they feel that the ICO's are a unregulated mess they should do what ICO Headstart does and come up with a quality mark for example. Start screening the ICO's and inform the consumers which ICO's are trustworthy and which are not.
I also believe that their warnings will have the opposite effect of what they are trying to achieve. A lot of people have made large sums of money with crypto and as the saying goes, "Money walks and BS talks".
The price Bitcoin has reached insane heights and the allure of becoming a millionaire by betting on the right coin is almost impossible to resist.
Buy a couple of million coins now for a $100 and maybe, maybe in a couple of years that $100 will be worth millions, who can say no to that?
The lack of regulation is the major problem that financial authorities have with cryptocurrency. By labeling the cryptocoins as fraudulent, money laundering, terrorist sponsoring pyramid schemes they hope to turn consumers away from investing. My take on it is that it is too little, too late. The ship has sailed, cryptocurrency is here to stay and It is better that the financial world gets onboard or they may be left behind in the dust.
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