Spanish multinational banking group BBVA has said that Initial Coin Offerings (ICOs), a form of funding which has become very popular in recent times, is facing a dangerous bubble driven by speculation.

At a round table on the ICO phenomenon organised by Blockchain España in Madrid’s Impact Hub, experts said that a bubble has been created that has to burst as smoothly as possible. The experts believe that the problem with ICO is not a lack of regulation, but that the ICOs are “getting out of hand.” They used terms like “irrational fever”, “bubble”, and “avalanche of greed” to describe an investment spiral that has reached dizzying heights.

It is calculated that various blockchain start-ups have already reached $380 million through ICOs. While this form of funding enables entrepreneurs to pursue their projects which they couldn’t have even dreamed of, the ICO bubble also has serious negative effects, both from an investor point of view and with respect to blockchain’s business and social sense itself.

“These are very interesting times, as we are funding the internet of value, but at the same time there are many scams and speculation”, stated Carlos Kuchkovsky, the CTO of New Digital Business at BBVA.

“Some people call and say that they want to start up an ICO to “raise” a lot of money. We are suffering from a senseless fever. It is a regretful situation”, explained Cristina Carrascosa, a lawyer specialising in blockchain.

BBVA pointed out that ICOs are currently in limbo in Spain from a legal standpoint, so current regulations can be applied to them for crowdfunding, for securities or for risk capital. It also noted that the U.S. Securities and Exchange Commission (SEC) recently announced that it would consider tokens issued in ICOs as securities, with the same legal responsibilities for investors.

“We need even more guarantees in all of these processes; otherwise, the bubble will burst in the worst way possible”, said Adrián Calvo, co-founder of Icofunding. “Does a start-up need 250 million dollars? Not even Google or Facebook had that”, he said and highlighted the need for clear rules to be set for the use of that money by company managers.

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