There have been a few complaints to the invention of the ICO. It was expressed that the ICO is also used for fraudulent activities such as pump and dump schemes and internet scams. Although it is still used for legitimate business like the charitable fundraising, corporate finance transactions, the Security and Exchange commission has informed the general public that scammers now ‘Talk Up” the intrinsic value of ICOs with the aim of generating interest in order to bring up the value of the coins and then, through insider knowledge, sell the coins on a profit. Also, major stakeholders in the investment industry have warned that many ICOs are of a high-risk nature and can be very speculative thereby leading to major scams.
Given the issue of the possibility of crypto been moved from country to country easily without jurisdictional restrictions, central authorities have found it hard to monitor the movement and holdings of cryptocurrency. This has led to countries implementing policies on how best to regulate in the use of crypto in international transactions. With this, there are two types of regulatory crypto which are: utility tokens and assets backed tokens. Utility token allow the holder to exchange it for a service or good in the future such as bitcoin because they hold a considerable value. Asset backed tokens is an underlying asset of which the holder can attribute a value to. In many cases, its is mandatory that the assets backed regulation require permission and regulatory approval before use unlike the utility tokens which do not require regulation in many countries. This makes it hard for the issuers of crypto to analyze and track the countries in which tokens are being sold or bought to.
The ICO is the latest biggest trend In cryptocurrency as it is basically used in a blockchain project which evolves into a successful means of raising funds for the development of a new project.
Going with the projections of crypto experts, the future of ICOs hope to bring even better considerable impact into the technology space as there have been predictions that regulations will be enforced along side a legal ICO framework will be implemented. This will lead to a wide range of unexpected changes. If this legal framework is not implemented quickly, IPOs may take the place of ICOs which would allow for hedge funds to join the crypto World.
Also, if there is an impressive legal framework, the value of the ICOs will pull up and this will result to more profitable ICOs.
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