The UK’s Financial Conduct Authority (FCA) has released new guidance on ICOs, urging consumers to be “conscious of the risks.”

In one of the more moderate responses to the growing investment phenomenon, the FCA refrained from any suggestion that specific schemes may face legal difficulties.

Certain businesses may be “conducting regulated activities” as part of their ICO, but this would be decided on a “case by case basis.”

“Many ICOs will fall outside the regulated space,” a bulletin on the Authority’s website reads.

“However, depending on how they are structured, some ICOs may involve regulated investments, and firms involved in an ICO may be conducting regulated activities.”

In holding off on blanket legislation for token sales, the FCA follows the example of the US Securities and Exchanges Commission (SEC), which also advised it would consider each ICO scheme on its own merits.

Hong Kong has also followed suit in this respect, while markets continue to feel the pressure of China’s all-out ban on ICOs enacted last week.

Six risks

In the West, Canada most recently caused a stir when a planned $125 mln ICO from social media platform Kik, opted to exclude its citizens due to legal uncertainties.

In turn, the FCA highlighted six “risks” which served to make ICOs “very high-risk, speculative investments.”

“You are extremely unlikely to have access to UK regulatory protections like the Financial Services Compensation Scheme or the Financial Ombudsman Service,” the bulletin explained about the level of investor protection offered in the UK for victims of fraudulent schemes.

The Authority also encouraged consumers to report “scam” ICOs directly.