One type of financial trading you may be interested in doing is investing in something known as an initial coin offering, what that will entail you doing is buying a cryptocurrency and the funds raised by that newly launched cryptocurrency will then help to launch a company.
The value of the cryptocurrency you will be buying will be very low initially, and why people tend to buy into such schemes is that there is always the very real chance that the company that will be launching will be successful and that in turn will increase the value of the cryptocurrency that company backs.
However, currency anybody can launch their own initial coin offering with no checks performed by any government agency and that has of course led to a huge number of fraudulent initial coin offerings being launched.
The most common way investors will get ripped off is by being taken in by an ICO and believing it is backed by a soon to launch company that is going to be a hugely successful one, however that company never does launch and the cash paid for the cryptocurrency purchased are taken leaving investors with useless cryptocurrency coins and tokens!
How Can Initial Coin Offerings be Regulated
One of the major problems any government of the world is going to have in regards to attempting to regulated initial coin offerings is that the people running those ICO’s could be located in any country of the world, and that in itself is where the problem lays.
The only real way a government could possibly regulate an initial coin offering is by them licensing and regulating the company backing them, and only making them available to traders within that countries boundaries.
How to Avoid Getting Ripped Off by an ICO
There are several ways that you can try an avoid being ripped off by a fake and fraudulent initial coin offering, however they will all involve you doing lots of due diligence on the one you are thinking of investing in.
You will need to check out things such as the people behind the initial coin offering and seeing just what experience they have and that can be done on social media quite easily these days, but to try and check out those people in many other ways too.
You need to also get a full and deep understanding of not only how cryptocurrencies work and operate but also the companies that are launching with the help of an initial coin offering too.
Only once you are 100% convinced the ICO you are thinking of investing in is legal and legit should you ever part with any money and start infesting n them. I you do not do your due diligence then there is always going to be a very good chance that you could get ripped off and ripped off quite badly too!