Bitcoin (the daddy of cryptocurrencies) is either supported by a system that enables it to represent real value or a highly risky, speculative asset class. This is subject to wild pricing valuation. It has no real or standardised regulatory governance to protect investors as well as other stakeholders.
CO s (initial coin offerings) are presenting potential investors with various enticements but with very little proof of concept apart the lure of incredible returns. This is causing great alarm. Not only is this affecting governments and international bodies globally, but also to global influencers and social media giants like Facebook. As well as Global Banks, like Lloyds. They have banned the offerings of ICOs through their systems.
These moves are obvious and natural steps for responsible organizations to take. The anonymous nature of cryptocurrencies is enabling untraceable illegal activities, and also the wild fluctuations in the price, say of bitcoin, sometimes in a matter of seconds can result in financial ruin. Furthermore, there is growing suspicion that these cryptocurrencies are being manipulated with a view of cheating investors. The growing consensus among financial experts and academia is that cryptocurrencies represent a highly speculative asset class. There is a place for it in a well-diversified asset portfolio for the investor with a high-risk appetite. However it is not a currency in the way that we understand currencies should function.
The accepted wisdom is that. It is the blockchain technology underlying cryptocurrencies which can potentially be used to construct legal, as well as financial, transactions. Alongside this, contracts e.g. smart contracts, is where the real breakthrough lies for the legal, financial and international communities especially as this relates to the underdeveloped world.
This legal information is not the same as legal advice and you may not rely on our post as a recommendation of any particular legal understanding. Please, consult an attorney if you’d like to get advice on your interpretation of this article.