Thailand’s Securities and Exchange Commission (SEC) has released a warning to the public about investing in initial coin offerings ( ICOs ). The report explains that some of the coins being offered did not receive SEC approval, which means that investing in them could carry serious risk.
Additionally, the Thai SEC detailed that the tokens in question have not had their smart contracts audited by official ICO portals, increasing the risk of investment, according to local news outlet the Bangkok Post .
The report identified nine digital tokens and ICOs that were not authorized by the SEC, including: Every Coin, Orientum Coin (ORT Coin), OneCoin and OFC Coin, Tripxchain Coin (TXC Coin), TUC Coin, G2S Expert ICO, Singhcom Enterprise ICO, Adventure hostel Bangkok ICO and Kidstocurrency ICO.
Many of these coins have been promoted on social media platforms like Facebook and YouTube, which set off red flags for the Thai SEC. The regulator also warned that some of these cryptocurrencies are operated like Ponzi schemes, encouraging users to sell the cryptocurrency to their friends and family in exchange for referral bonuses.
Although not explicitly named, this could be in reference to OneCoin. OneCoin has previously been shut down by the Chinese government. The organization, widely believed to be a Ponzi scheme, has received scrutiny online. Operated as a “private blockchain,” some see it as little more than a scheme, especially after countries like China, India, and Italy issue warnings about OneCoin.
There are opportunists who persuade individuals to invest in digital assets by assuring investment returns generated from digital tokens that are structured like pyramid schemes.
The regulator’s move represents the continuing involvement of federal governments in the cryptocurrency space. The ICO boom of 2017 put the fundraising method under regulatory scrutiny.
This new financial instrument doesn’t fit under any one regulatory body, and confuses many regulatory bodies. Despite these challenges, governments are stepping in to police the space. Earlier this month (October 19, 2018), the United States’ SEC announced that it would be launching a new “ Finhub ” division to engage with ICO startups.