We’ve written a few times recently about the boom in ‘initial coin offerings’ (ICOs) for blockchain-based startups.

It’s a way of raising money by selling ‘tokens’ for a new cryptocurrency in exchange for an existing one, like Ether or bitcoin. One analyst recently claimed that more than $1.2bn has been raised in ICOs in the first half of 2017 alone.

There are concerns: first about the impact on the wider market – for example the value of Ether shot up from $8 at the start of 2017 to nearly $400 last month, before tumbling again – and also about the lack of regulation of ICOs compared to other kinds of funding. Now experts are speaking out about these.

“People say ICOs are great for Ethereum because, look at the price, but it’s a ticking time-bomb,” Charles Hoskinson, who helped develop the blockchain platform linked to Ether, told Bloomberg.

“There’s an over-tokenisation of things as companies are issuing tokens when the same tasks can be achieved with existing blockchains. People are blinded by fast and easy money.”

Another expert, Brad Garlinghouse of blockchain-based money-transfer firm Ripple, suggested that regulation in the US is imminent. “ICOs operating in the Wild West of finance isn’t sustainable. If it talks like a duck and walks like a duck, the SEC will say it’s a duck,” he said.

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