Giga Watt, blockchain good or bad, NASAA warning

According to coindesk.com article, Giga Watt, a startup that held an initial coin offering (ICO) to raise money to build a cryptocurrency mining facility, is being sued for allegedly conducting an unregistered securities offering.

The complaint was filed by a group of plaintiffs that contributed more than $20 million in cryptocurrency. In return for their contributions, investors were to be issued either Giga Watt tokens that would grant them exclusive rights to use the company’s facilities rent-free for 50 years, or mining equipment and supplies to be deployed and set up by the on-site project team.

Asserting that construction deadlines have not been met and promises to refund contributions have not been honored, the plaintiffs are seeking the return of their investments.

It is a reminder to all us, ICOs carries high risks, never risk money you can’t afford to lose in full.

“Ten years in, nobody has come up with a use for blockchain”, that the name of the article which was published at hackernoon.com. According to the article:

Everyone says the blockchain, the technology underpinning cryptocurrencies such as bitcoin, is going to change EVERYTHING. And yet, after years of tireless effort and billions of dollars invested, nobody has actually come up with a use for the blockchain—besides currency speculation and illegal transactions.

The author claims should not be ignored.

NASAA Reminds Investors to Approach Cryptocurrencies, Initial Coin Offerings and Other Cryptocurrency-Related Investment Products with Caution

Some common concerns investors should consider before investing in any offering containing cryptocurrency include:

  • Cryptocurrency is subject to minimal regulatory oversight, susceptible to cybersecurity breaches or hacks, and there may be no recourse should the cryptocurrency disappear.

  • Cryptocurrency accounts are not insured by the Federal Deposit Insurance Corporation (FDIC), which insures bank deposits up to $250,000.

  • The high volatility of cryptocurrency investments makes them unsuitable for most investors, especially those investing for long-term goals or retirement.

  • Investors in cryptocurrency are highly reliant upon unregulated companies, including some that may lack appropriate internal controls and may be more susceptible to fraud and theft than regulated financial institutions.

  • Investors will have to rely upon the strength of their own computer security systems, as well as security systems provided by third parties, to protect purchased cryptocurrencies from theft.

It is a reminder to all us, ICOs and cryptocurrencies investments carries high risks, never risk money you can’t afford to lose in full.