The US Commodity Futures Trading Commission (CFTC) published a document with recommendations for potential investors in ICO projects and token buyers. This is reported by Coindesk.
The agency's document says that before buying coins, you need to thoroughly study their nature and understand what factors can affect their price.
Also, a potential buyer should remember that, depending on the structuring, some tokens can be derivatives, commodities or securities.
Buying digital coins or tokens only because you expect to sell them at a higher price later is the definition of speculation and carries considerable risk, regardless of how good a white paper, application or business plan sounds. Unfortunately, fraud is another significant risk to consider. Your best protection is to thoroughly research digital coins or tokens and exercise caution.
CFTC ICO Advisory
The guide also states that before investing in the ICO, it is necessary to find information about the organizers of the project, and also to find out whether they themselves participate in their ICO.
Representatives of the agency also refer to the study, according to which more than 50% of ICO start-ups ceased to exist during the first four months after the end of the token.