The International Organization of Securities Commission (IOSCO) has issued an official communication on concerns related to initial coin offerings (ICOs).

“These offerings are not standardized, and their legal and regulatory status is likely to depend on the circumstances of the individual ICO,” IOSCO said. “There are clear risks associated with these offerings.”

Calling them “highly speculative investments,” ICOs noted that there have been instances of fraud and urged investors to be highly cautious when considering ICO related investments.

“ICOs are highly speculative investments in which investors are putting their entire invested capital at risk. While some operators are providing legitimate investment opportunities to fund projects or businesses, the increased targeting of ICOs to retail investors through online distribution channels by parties often located outside an investor’s home jurisdiction -- which may not be subject to regulation or may be operating illegally in violation of existing laws -- raises investor protection concerns,” it added.

In October 2017, the IOSCO Board discussed the growing usage of ICOs to raise capital as an area of concern. Following this meeting, IOSCO issued a statement to its members underscoring the risks of ICOs and referenced various approaches to ICOs taken by members and other regulatory bodies.

In addition, the IOSCO Board has also established an ICO Consultation Network which provides a platform where members can discuss their experiences and bring their concerns, including any cross-border issues, to the attention of fellow regulators.