Meginmál

Crypto-assets and crowdfunding

Crypto-assets

  • Crypto-assets are valuables in digital form that can be used as payment for goods and services or held as an investment.
    • Examples of crypto-assets are Bitcoin and Ethereum.
  • Crypto-assets are not issued or managed by a public entity such as a central bank.
  • Distributed Ledger Technology (DLT) is used to perform transactions and transfers with crypto-assets. Blockchain is an example of distributed ledger technology.
  • Trading crypto-assets can be very risky.
    • There is a risk of losing your entire investment.
    • Prices can fluctuate rapidly in a short period of time.
    • You can become a victim of fraud, scams, outages or computer hacks.
  • You are unlikely to benefit from any rights or compensation, as you would with financial assets in banks, if things go wrong. There is little or no control over crypto-assets until markets in crypto-assets legislation has been enacted.
  • The supervision of crypto-asset service providers is limited to the supervision of measures against money laundering and terrorist financing pursuant to Act no. 140/2018.
  • There is no supervision of consumer protection for crypto-asset trading.

Crowdfunding

  • Crowdfunding is a financing method that small start-ups and individuals often use to raise funds for specific projects.
  • Many parties contribute a small amount, either as a grant, in exchange for a product or service, a stake in an undertaking or in the form of a loan.
  • Funding is conducted on the websites of crowdfunding undertakings or social media.
  • Service providers take a fee from the funding obtained. The amount varies but is usually a percentage of the amount collected.
  • It is most commonly debited from payment cards. It is therefore important to make sure that the payment sites are secure.
  • No rules apply to crowdfunding.
  • There are plans to implement European regulations for crowdfunding service providers.
  • The Central Bank of Iceland does not supervise crowdfunding.