Chapter 13: INITIAL COIN OFFERING (ICO)

Digital/Alternative financing for Private companies (tech firms etc)

Prohibited in Malaysia because of the various risks

Replaced by Initial Exchange Offerings (IEO) in Malaysia

THREE (3) categories of risks involved

  1. Risks related to ICO funding models
  1. Technology-related risks
  1. Regulatory & legal risks

Lack of transparency

Dilution

No tangible product

Marketing and ICO sales

Lack of due diligence

Protocol-related risk

Cybersecurity risk

Open-source risk

Data security

No utility value behind the blockchain used

Ponzi Schemes and scams

Money laundering & illicit activities

Regulatory uncertainties (Black swan risk

Insider trading and market manipulation

Speculative 'pump & dump' behaviour & market manipulation