IOSCO Warns Investors on Crowdfunding & Bitcoin Risks

The International Organization of Securities Commissions – IOSCO – has put crowdfunding on their list of investors risks, together with Bitcoin and other cryptocurrencies.
Also read: ‘Bitcoin’ Becomes Trademark in Russia to Prevent ‘Patent Trolls’

IOSCO Eyes Cryptocurrency & Crowdfunding Risks


Investors all over the world are looking for ways to diversify their portfolio. Rather than sticking with government bonds, stock market trading, or foreign currency, new and disruptive models are starting to gain more traction. Among these concepts are both crowdfunding and digital currencies, both of which pose a significant investor risk according to IOSCO.
Security regulators from all over the world make up IOSCO, which has the primary goal of implementing and promoting adherence to the international strategies of securities regulation. Moreover, ISCO members seek to share their knowledge and guidance with investors all over the world, making them aware of potential risks and pitfalls.
Some people may recall the previous investor warning issued by the IOSCO as they were not too keen on the concept of FinTech last year. In fact, the organization mentioned how “regulators have got to wake up quickly and get up to speed.”
This demonstrated how the organization was behind the curve on catching up on what FinTech embodies. Now that they are warning on crowdfunding and cryptocurrencies such as Bitcoin, it seems that they are straggling once again, as even the world’s major banks have since shifted to studying Bitcoin’s underlying and potentially disruptive technology, the blockchain.
IOSCO’s March report mentions the following:
Some examples of potential channels for changes brought about by technological revolution – often referred to as ‘digital disruption’ – in securities markets include: robo-advice for investment; payments (i.e. crypto currencies); capital raising through crowdfunding and peer to peer lending; the proliferation of Smartphone nance “apps”; distributed ledger technology; and the use of ‘big data’ to better understand the needs of financial services consumers.
While there is a point to be made as to how investors need to tread carefully in the dangerous investment landscape, most of them are perfectly capable of assessing risks themselves. Crowdfunding and cryptocurrency are not new concepts by any means, as they have been around for several years now. However, it is not the first time IOSCO had issued a warning on these investment opportunities either.

Bitcoin & Crowdfunding Will Disrupt


It is also worth noting how the report mentions there are five different areas of innovation, which will disrupt the financial services sector as we know it. Technology giants are entering the payments industry, and finance applications on smartphones are becoming more widespread than ever before.
But the real innovation is coming from the equity crowdfunding and peer-to-peer lending platforms. Both solutions offer an alternative form of financing for SME’s and entrepreneurs all over the world. Since neither of these concepts can be controlled by banks or governments, it is not unexpected to see IOSCO issue a warning for investors.
What are your thoughts on this IOSCO report? Is there anything else in there which has caught your attention? Let us know in the comments below!

Source: Scribd
Images courtesy of IOSCO, Shutterstock

Komentar

Posting Komentar

Postingan populer dari blog ini

Transformation of education in post-industrial society

Gambar
Education has always been an expensive privilege; and the education sector has always been one of the most conservative. People chose profession once in their life and did not change it until retirement. Usually education meant studying at a university; self-taught people were rare. However, in the post-industrial society changes in the shape, sense and affordability of education finally began. According to Alvin Toffler, a well-known US sociologist, the emergence of the post-industrial society is a consequence of the intellectual revolution. The possession of knowledge and information will replace financial capital as the biggest value. Development of innovations, empowered by the most educated, will become the most important sector of economy. It means that high-quality affordable education will become even more important than now. The last time when the global education experienced a serious transformation was at the very beginning of the 21st century when the wide access to the I...
Baca selengkapnya

Blockchain Supply Chain Forum will be held on January 10th in Hong Kong

Gambar
The concept of a blockchain – a distributed, tamper-proof and time-stamped database of transactions that can be managed without intermediaries – is highly attractive in the supply chain domain, and the industry has launched a number of proof-of-concept initiatives. However, awareness of how blockchains work and what they can accomplish for supply chain is still relatively low. The lack of knowledge is exacerbated by the fast pace at which the technology is evolving. A success Blockchain Supply Chain Forum was held on October 24th in Shanghai, professional blockchain organizer EventLinker and Global Supply Chain Council will organize the Blockchain Supply Chain Forum on January 10th in Hong Kong, it is the forum connecting blockchain experts, supply chain and logistics decision makers and tech innovators. This intimate gathering will explore how companies are investigating the use and deployment of the technology to help their supply chains in China. Organizer: EventLinker ...
Baca selengkapnya

After GDPR effect? In A Post Cookie World, Blockchain Is Rising

Gambar
The European General Data Protection Regulation (GDPR) was rolled out in May this year. It introduced far-reaching implications for companies which process personal data related to EU citizens. Even those far outside the EU could not fail to notice this change. Email inboxes were overflowing with opt-out reminders. Cookie banners now obscure many websites, forcing users to agree to a privacy policy so that they can browse the content on the site. Although the GDPR document itself clocks in at 88 pages, the majority of what it covers can be summed up in one word — consent. If companies are processing personal data, it must be done with the explicit, informed consent of the individual. For some forms of marketing, such as email subscriber lists, this involved minimal changes. Individuals already have to take the active step of providing their email addresses, and usually it is pretty clear why they are asked to do so. However, for the digital advertising industry, consent is far less ...
Baca selengkapnya