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Cryptocurrencies

Dutch stock exchange authority warns about investing via digital currencies

Tuesday 14 November 2017 | 12:42 PM CET

AFM, Dutch stock exchange watchdog, has been warning investors about the big risks related to ICOs using digital currency such as Bitcoin.

ICOs fall out of the remit of the AFM, which says they are vulnerable to manipulation and can be used for money laundering. The hype for high returns blinds people to the risks associated with cryptocurrencies, an AFM representative said.

ICOs resemble IPOs in that new internet companies raise money from them all over the world. These companies issue tokens which are bought by investors using digital currency. This year alone some 210 companies have raised EUR 2.3 billion through ICOs, according to the FD.

The AFM is not the only watchdog to warn against ICOs, SEC in Washington DC has also warned about two companies involved in the business, and the Chinese authorities have forbidden ICOs.

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