France’s AMF receives 2,261 enquiries about crypto-assets in first 10 months of 2018

Maria Nikolova

The majority of cases concern fraudulent offers of investments in cryptocurrencies rather than ICOs.

The investor info center of the French Financial Markets Authority (AMF) received 2,261 enquiries about crypto-assets in the first 10 months of 2018. The data comes from an analysis of the ICO market in France, published by the AMF today.

Whereas the regulator confirms that there are concerns about crypto fraud, in most the cases complaints concern fraudulent investments in cryptocurrencies rather initial coin offerings (ICOs). They remain a rather marginal method of financing, having generated EUR 19.4 billion since 2014. France represents a minor part of this market, with 15 ICOs having generated EUR 89 million.

The French regulator notes that meager 6% of the tokens display characteristics of financial instruments.

ICOs come with their risks. These include absence of price transparency, as well as risks of cyber attacks.

Although some institutional investors (hedge funds) have started to invest in ICOs in certain jurisdictions, the majority of traditional institutional investors steers clear from these offerings. Overall, the AMF concludes that the number of investors in tokens is quite small.

Regarding the risks concerning crypto-assets, and cryptocurrencies in particular, the French regulator has started publishing a black list of fraudulent cryptocurrency platforms. Currently, 74 such platforms are suspected of making fraudulent solicitations.

A recent AMF Newsletter has provided some information about crypto-asset ads. During the first nine months of 2018, these accounted for 12% of the ads of investment products. The percentage is higher than the level of below 3% for 2017.

Advertisements of CFDs and other highly speculative online trading products accounted for 24% of all the investment ads in France in the first nine months of 2018. This is way below than the higher share seen in previous years. Until 2016, the share of these ads was around 50%. Also, the ads for such products had become more restricted in their content and now focus on offers permitted under the Sapin II law. This law prohibited digital advertising of all sorts of high-risk products, including CFDs with high leverage.

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