The making of a margin lending market in digital assets?

Reported valuations of cryptocurrencies and digital assets are on the rise. Interest from professional and retail market participants alike are pushing cryptocurrency out of the fringes of financial markets and very much towards the centre. Moreover, the range of new providers coming to market via initial coin offerings (ICOs) or from those established firms and new entrants structuring financial instruments, funds and/or benchmarks referencing the underlying valuations of cryptocurrencies, have endorsed this emerging asset class even further. 2018 is unlikely to be any different in terms of growth of investments in cryptocurrencies and digital assets reliant on distributed ledger technology and transactions (DLT).

Regulators’ warnings zoom in on Initial Coin Offerings

Initial Coin Offerings (ICOs) come in different sizes and forms. They also offer different risk exposures to different business models across different jurisdictions and their legal systems. Interest in ICOs, cryptocurrencies and digital assets, notably from retail clients and non-professional market participants, are increasingly causing EU and national as well as supervisory authorities including ESMA to issue warnings on their risks and those financial products that reference cryptocurrency and other digital assets.