The 2018 ICO Crash Gets New Spotlight Shined on It for Insider Trader from Former Employee
Various countries treat ICOs different. For instance, both China and South Korea have issued various regulations, while others have done very little to regulate.
Countries that have failed to instill regulations have a “wild, wild west scenario,” which is not always beneficial for new investors.
There are also some concerns about the token economy. In a reddit post by AsleepInstruction8, who claims that he has worked for an ICO company, there is a disturbing lack of regulatory oversight and accordingly, ordinary investors may find themselves victims of investment scams and insider trading.
He claims that his own workers purchased tokens just before good news was released and then sell those tokens before the bad news hit.
This type of scenario is often described as insider trading and there is very little that can be done because ICOs are not regulated by the SEC – yet. He also added that the founder of the company he had worked at lost 90% of the $20 million funds raised in an ICO by using it on personal spending.
It is normal and seemingly legitimate to be wary of ICOs. While there may be some legitimate platforms out there, there are others that are certainly worth staying away from. The best things that those who are interested in investing can do is to choose wisely by doing their research and ensuring that they are making the right decision.
Spending some time on learning about the ICO, its history, and the like, can lead to much better results at the end of the day. Further, if the SEC does decide to start regulating ICOs, then investors may be able to be just a bit less wary of the ICO that they choose.