U.S. Regulator Warns Consumers About Perils Of ICOs

Investing.com - The Commodities Futures Trading Commission has issued another consumer warning about cryptocurrencies, this time focusing on their purchase through initial coin offerings. The regulator says consumers should do "extensive research" before purchasing virtual coins, otherwise known as tokens, and be aware that fraud is a "considerable risk."The CFTC says consumers need to be "especially wary of any promises or guarantees of future value," and warns that buying coins simply because you expect them to sell at a higher price "carries considerable risk." The regulator advises people learn what rights may be attached to the coin and what underlying factors could affect its value. Both the CFTC and the Securities and Exchange Commission have been cracking down on ICOs because of the prevalence of fraud.