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EU markets watchdog warns of ICO risks

The European Securities and Markets Authority (ESMA), following many other regulators, warned about the risks associated with the primary coins placement (ICOs).

ESMA notes that ICO is an extremely risky and speculative type of investment, characterized by the extreme volatility of the price of the token and the impossibility of its repayment for a long period.

Another risk is that, depending on the structure of the transaction, ICO can fall out of the scope of EU legislation, which will deprive investors of traditional means of protection.

In addition, ICO transactions involve increased risks of fraud and money laundering, ESMA notes.

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