German Regulator Issues Warning On ICOs

German Regulator Issues Warning On ICOs

German Regulator Issues Warning On ICOs


German regulator issues warning on ICOs, this makes BaFin the latest market watchdog to issue a warning on ICOs. Germany’s top financial regulator, the Federal Financial Supervisory Authority (BaFin) has issued a warning to investors about the risk of investing in (ICOs).

In a notice published yesterday, the financial authority wrote:

ICOs are a highly speculative form of investment. Investors should therefore be prepared for the possibility of losing their investment completely. As is the case with most new trends, the high level of public interest in ICOs is also attracting fraudsters.

BaFin stated in the release:

“Due to the lack of legal requirements and transparency rules, the consumer is left on their own when it comes to verifying the identity, reputability and credit standing of the token provider and understanding and assessing the investment on offer. It can also not be guaranteed that personal data will be protected in accordance with German standards.”

Although the notice stopped short of issuing guidelines for ICO operators, the authority confirmed a more detailed take on ICOs and their risks, for consumers, on November 15.

The regulator also warned that before they decide to take part in an ICO, consumers should make sure that they fully understood the benefits, as well as the risks of the investment or project. It further added that taking the necessary measures against ICOs may result in possible losses for investors in token sales that prove to be fraudulent in nature.

“Before any consumer decides to participate in an ICO, they should make certain that they have fully understood the benefits and risks of the project or investment.”

Other Countries Views On ICOs


The common opinion that Initial Coin Offerings (ICO) are a form of raising capital that is subject to no regulations is increasingly facing headwinds from international regulatory authorities. Supervisors in many countries have made it clear through public statements that ICO regulation might entail regulatory consequences not only for future projects but also for ICOs already completed

While authorities in China and South Korea have issued blanket bans on ICO activity, regulators in other jurisdictions like Australia, Thailand, Abu Dhabi and even Russia have been more accepting of ICOs.

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