European Union Issues Two ICO Warnings

European Securities and Markets Authority (ESMA) issued two same-day warnings concerning initial coin offerings (ICO) on 13 November after the preceding weekend was witness to dramatic swings in prices and volatility. One release is geared toward investors and the other is aimed at participating firms. 

Also read: Israel Securities Authority Chairman Outlines Concerns Regarding ICOs

ESMA Warns ICO Investors

In what might be taken as a response to a rollercoaster weekend for cryptocurrency markets, where bitcoin cash traded places with ethereum, and bitcoin shed billions, ESMA has issued two same-day statements regarding ICOs.

Dated 13 November 2017, ESMA50-157-829 focuses its attention on investors. “If you are considering investing in ICOs or have already done so, be aware of the many risks this may entail,” ESMA begins, “including the total loss of your investment. In particular, be aware that you will have no protection,” they note.

ICOs are indeed largely unregulated in the traditional sense, having gained great traction this year as at least a tail in the price-comet that is bitcoin.

“ESMA has observed a rapid growth,” they write, “and is concerned that investors may not realise the high risks that they are taking.” “ICOs are highly speculative investments,” and “depending on how they are structured, may fall outside of the regulated space, in which case investors do not benefit from the protection,” they reiterate.

The regulatory arm is one of the three European Supervisory Authorities within the European System of Financial Supervisors bureaucracy.

They continue, “ICOs are also vulnerable to fraud or illicit activities, owing to their anonymity and their capacity to raise large amounts of money in a short
timeframe.” Risks include the above along with money laundering, losing one’s entire capital, lack of exit options and price volatility, inadequate access to information, and fundamental flaws in early, untested technologies, the body urges.

“Virtually anyone who has access to the Internet can participate in an ICO,” they point out.

ESMA Warns Participating ICO Firms

ESMA50-157-828 is decidedly more stern in its tone. Issued the same day, it urges firms “to meet relevant regulatory requirements.” In a cat-and-mouse, near Orwellian turn of phrase, they argue, “If their activities constitute a regulated activity, firms have to comply with the relevant legislation and any failure to comply with the applicable rules would constitute a breach.”

This might be very difficult for firms to ascertain, especially when the very same body refers to them as “unregulated.” Keen readers might ask, are such offerings regulated or not?

Some clarification might be had in the following: “where the coins or tokens qualify as
financial instruments it is likely that the firms involved in ICOs conduct regulated investment activities, such as placing, dealing in or advising on financial instruments or managing or marketing collective investment schemes,” the body details. These too seem rather broad and vague.

The memorandum then sets out some basic guidelines for firms. A prospectus is urged among start-ups in the field, containing “necessary information which is material to an investor for making an informed assessment of the facts and that the information shall be presented in an easily analysable and comprehensible form,” ESMA advises.

It continues in this manner, imploring firms to also be transparent in their organizational dealings and structure along with complying with anti-money laundering regulations. “Firms have an obligation to report any suspicious activity and to co-operate with any investigations by relevant public authorities,” they say.

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Jeff Garzik Is Launching A Cross Chain ICO Called Metronome

Jeff Garzik has been something of a controversial figure in the Blockchain and Bitcoin space over the last twelve months. He was one of the first Bitcoin developers to take on an active paid role at a blockchain startup and he's since become an active proponent of the Segwit2X event and has become renowned for taking on any denouncers as part of heated Twitter arguments via his personal account.

Anyway, the latest news is that Garzik has decided that he's going to launch a fresh startup and he's going to do it by way of an initial coin offering (ICO).

The new venture is called Metronome and it's reportedly going to aim to allow cryptocurrency users and holders to jump between blockchains.

This is one of those things that has long been discussed as a potential answer to some of the shortfalls of the digital currency space but – until now – nobody has really taken action to get it into the real world. With Metronome, Garza is reportedly trying to do just that. The process will involve what he calls a 'proof of exit receipt', which serves as a sort of confirmation type item that a user has left one blockchain for another.

The announcement came at the Money 20.20 event that's currently ongoing in Las Vegas and that will wrap up today.

Here's what Matthew Roszak, co-founder of Bloq and chairman of industry advocate Chamber of Digital Commerce, had to say about the fresh development:

"Institutional investors should be very excited to see something like this, we’ve built a thousand-year cryptocurrency, something that’s built to last.”

And here's what Garzik himself said about the new venture:

"If I had a clean slate of paper this is what I would design.”

No doubt this event will cause some controversy in the space, not least because of its time (right ahead of the forking).

Let's see how things play out.

Source bitconnect

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GMO Will Hold an ICO to Fund Its Chip Development

Back in September, news hit the press that a Japanese company was developing what are essentially the next generation of Bitcoin mining equipment. The company in question, called GMO, outlined its intentions to create mining boards that are equipped with 7nm ASIC chips – dramatically improved over the current 16nm used today.

Fast forward a few weeks and we have just picked up on some fresh information related to the technology. Specifically, GMO as reported that it is going to use an initial coin offering (ICO) to underpin its sales efforts for its new Bitcoin mining operations.

While we don't know the terms of the sale and the structure it will accommodate, the company has said that it will be conscious of the protection of token purchasers and stakeholders’ profits when designing the token sale.

That's pretty vague, but chances are that it will involve offering customers the chance to purchase tokens ahead of production and then use these tokens to buy the mining equipment as and when it becomes available.

Here's the company's official line on the legal side of the development:

"We will consider properly the laws and regulations that are applicable to us under the current legislation including Payment Services Act and the Financial Instrument and Exchange Act.”

Beyond 7nm, GMO is also working on the development of mining equipment equipped with 5nm and 3.5nm chips. However, it's worth noting that, in reality, these sorts of cheap powers are a long way off and is probably going to take a few years before they are available for mass production.

According to the company, with the 7nm chips, it will be possible to reduce power consumption compared to the existing mining machines with the same performance, and achieve a computational performance of 10TH/s per chip.

That's a major shift and one that could change the face of Bitcoin mining as we know it long-term.

Source bitconnect

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