The UK’s financial watchdog – the Financial Conduct Authority (FCA) – announced last Friday that a deeper analysis needs to be carried out on the applicability of national laws to the initial coin offerings (ICOs) funding mechanism in order to determine the need for “further regulatory action”.
The FCA has been widely discussing the Blockchain technology lately and according to the feedback statement from Friday, it intends to perform a “deeper examination” of developments by gathering more evidence and information. The statement added:
“Its findings will help to determine whether or not there is need for further regulatory action in this area beyond the consumer warning issued in September.”
Back in September, the FCA issued a warning to consumers about the risks of ICOs, considering these as very high-risk, speculative investments and adding that these are currently unregulated and therefore certain protections are not in place like they normall are on the financial market. These are additional risks on top of the common ones within the cryptocurrency market, such as price volatility and possibility for fraud.
The feedback statement had received 47 responses from various market participants such as regulated firms, trade associations and law firms.