Cryptocurrency fundraising methods (ICOs) have brought in billions of dollars for retail investors this year. Yesterday, Nasdaq CEO Adena Friedman criticized ICOs at the Future of FinTech conference in New York. She believes that ICOs are very risky for retail investors.
Friedman said,
With no rules at all, companies can take retail investors' money at will without providing any information, and there is no supervision. It sounds like retail investors are being exploited by ICO issuers.
The “exploited retail investors” Friedman refers to are often first-time investors like “Auntie from Iowa” (American version of Chinese aunts) who know little about the investing business and lack relevant information. Although the SEC requires companies to provide IPO retail investors with the same information as institutional investors, this is not well enforced due to the lack of regulation in the cryptocurrency market.
Friedman said,At present, there is little regulation in the ICO field, and there are many retail investors. This means that the transparency, supervision and accountability mechanism of the company's fundraising process through the ICO method is lacking.
During the ICO process, tokens are usually offered for sale in crowdfunding. Unlike stocks used to obtain voting rights or dividends, these tokens can only be used to access networks, platforms, and related services, and the backing tokens may only be an abstract concept or idea.
CNBCEOS developer Block.one raised $4 billion in late May, a figure that eclipses the world's largest IPO on stock exchanges this year, according to Bloomberg. However, Block.one’s flagship product had not yet launched when this massive fundraising was received.
EOS, the largest ICO in history, is just a case of the "frenzy" of virtual currency fundraising. According to research firmAutonomous NextThe data shows that in 2017, ICO raised funds of US$6.6 billion, and this year this figure has reached US$9.1 billion.
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SEC Chairman Jay Clayton believes that,Most ICOs and many other crypto assets should be considered unregistered securities.Friedman agrees and supports this.
In April this year, Friedman revealed to CNBC that Nasdaq would consider establishing a digital currency exchange once the regulation is stable and the market matures; howeverCurrently, Nasdaq tends to take the cooperative route.
Earlier, Nasdaq announced a partnership with cryptocurrency exchangeGeminiCooperation, the exchange was co-founded by early bitcoin investors Tyler Winklevoss and Cameron Winklevoss. Gemini CEO Tyler Winklevoss said in a statement that the partnership will allow Gemini to use Nasdaq’s monitoring technology to ensure a fair, rules-based market environment for its platform participants.
In this regard, Friedman further stated that although cryptocurrencies such as Bitcoin may have a huge impact on the financial industry in the future, due to the fact that cryptocurrencies are currently in a completely unregulated market environment, compared to Nasdaq’s own digital currency transactions Therefore, it is safer to choose a partner to enter the market.
In the end, Friedman believes that it should be assumed that cryptocurrency will be a very interesting thing, and that it will become a real makeup of the Internet. But it may also "die on the vines", and even becomebeanie babyI am Zhang Yi, a reporter from Odaily. I am exploring the real blockchain. For breaking news and communicating, please add WeChat ro20110723. Please note your name, unit, position and reason.
I am Zhang Yi, a reporter from Odaily. I am exploring the real blockchain. For breaking news and communicating, please add WeChat ro20110723. Please note your name, unit, position and reason.
