Cryptocurrencies: City watchdog to investigate new fundraising trend
The City regulator is intensifying its scrutiny
Celebrities such as Paris Hilton, Floyd Mayweather and Harry Redknapp have associated themselves with ICOs, which can be used to raise money for internet startups. Hilton, though, is reported to have deleted some of her tweets.
Instead of raising cash in conventional currencies, investors in ICOs pay in cryptocurrencies such as bitcoin and receive a “coin” in return.
Earlier this year, the Financial Conduct Authority issued a warning about ICOs, telling consumers they could lose all their money in the “very high-risk, speculative investments”.
On Friday, the FCA said it would now “gather further evidence on the ICO market and conduct a deeper examination of the fast-paced developments”.
“Our findings will help to determine whether or not there is need for further regulatory action in this area,” the regulator said, in a review of the digital ledger technology that underpins the sector.
