The City watchdog is probing the market for initial coin offerings (ICOs), an in-vogue crowdfunding mechanism that involves projects raising cash in cryptocurrencies such as Bitcoin. The Financial Conduct Authority (FCA) said it planned to “conduct a deeper examination of the fast-paced developments” in ICOs and would assess if it needs to take “further regulatory action”. ICOs involve companies issuing “tokens”, an asset similar to a cryptocurrency that is linked to the company’s success, in exchange for a digital currency like Bitcoin or Ethereum. They have become fashionable in recent months as start-ups seek to raise funds from newly-wealthy cryptocurrency investors, but have also attracted regulatory scrutiny amid a wave of cyber attacks and scams. China has banned the schemes and America’s Securities and Exchange Commission shut down one ICO this week after it failed to register as a sale of securities.
The UK 's Financial Conduct Authority ( FCA ) is considering whether it needs to take regulatory action on initial coin ##ages ( ICOs ) . The FCA is examining the market for ICOs , which have become increasingly popular as start - ups seeking to raise funds from cryptocurrency investors . ICOs have faced increased regulatory scrutiny globally after a series of attacks and cyber attacks , with China already having investigated them . The ##A earlier warned that ICOs are " high - risk " investments , the majority of which are unregulated . The review is being undertaken as part of research into distributed ledger technology .