The United States Federal Bureau of Investigation (FBI) has warned investors about the potential risks of fraudulent Initial Coin Offerings (ICOs).

Speaking to Netherlands-based financial news site the Paypers, the Bureau outlined the key strategies of scams, which included misrepresentation of the team and false claims of how much the project will affect the industry.

“Like any investment product, rates of return can never be guaranteed, and if it sounds too good to be true, it probably is.

“Unfortunately, many citizens, both US and foreign, have fallen prey to fraudulent coin offerings, investment frauds generally, and other scams involving virtual currency. While the FBI and other law enforcement and regulatory agencies are actively trying to eliminate the scams and bring the scammers to justice, there seems to be a lucrative market for the scammers, meaning they continue to appear.”

US regulator the SEC has been actively clamping down on dishonest ICOs over the past year, issuing penalties to the likes of Airfox and Paragon.

In the UK, the Financial Conduct Authority (FCA) is currently consulting ahead of the release of regulatory frameworks on digital assets, which are expected this summer.

Christopher Woolard, executive director of strategy and competition at the FCA, said: “This is a small but growing market and we want both industry and consumers to be clear what is regulated and what isn’t. This is vital if consumers are to know what protections they’ll benefit from and in ensuring we have a market functioning as it should.”

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