Bitcoin scam alert: ICO fraud warning for investors from watchdog


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Investors press been over ICO scams amid the soaring popularity of bitcoin

The cost out of bitcoin has jumped from around $600 to almost $5,000 in the place of 12 months.

The huge rise in value has also led to higher honoraria in rival digital currencies such as ethereum — and also fuelled the trend of ICOs.

But the Financial Conduct Authority (FCA) is now warning that ICOs are certainly high risk and speculative investments — and in some cases are a scam.

And anyone who extinguishes their cash into the digital projects should be prepared to conquered their entire stake.

The so-called token or coin sales are typically deliberate as a way of raising funds for projects using cryptocurrency.

ICO issuers take bitcoin or ethereal in exchange for coins or tokens related to the firm or concoct raising funds.

The coin could be a share in the company or a voucher for tomorrows services.

In some cases it is hard to decipher the value of the coins, according to the FCA.

And there is the capacity that the ICO is a fraud simply designed to trick people out of money.

The watchdog combined that even in genuine cases tokens are typically for projects in the unquestionably early stages of development — investors face high risks by focus on involved.

Therefore, ICO investment should only be contemplated by experienced investors who are fearless in the project raising funds, the FCA said.

The regulator has stressed that sundry ICOs are not regulated and based overseas — meaning there is no protection for investors, should something go damage.

Instead of a regulated prospectus, ICOs typically specify a white paper aimed at raising cash — which could be unbalance or duping, the watchdog warned.

The volatility of cryptocurrencies, such as bitcoin, also means investors could see complete changes in the value of investments.

It comes after China recently banned ICOs.

Anyone who thinks an ICO is a scam can repot it to the FCA online.

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