The Autorité des marchés financiers (AMF) warning investors about the risks associated with cryptocurrency or token offerings, more commonly known as initial coin offerings (ICOs) in a investor alert published Monday.

The warning also reminds prospective issuers about the possible application of securities laws to these sorts of offerings.

In the alert, the AMF stress that cryptocurrencies and ICOs are “speculative, high-risk investments”, and it reminds investors to ensure that they fully understand how these vehicles work, along with the associated risks, before they invest. Investors should be prepared to lose their entire investment, the alert warns.

“From the promising future of blockchain technology to the volatility of bitcoin, so much has been said about cryptocurrencies that consumers are finding them increasingly difficult to understand,” says Jean-François Fortin, executive director, AMF enforcement,” in a statement. “If there’s one thing to keep in mind, it’s that if you’re offered ‘guaranteed’ profits, promised quick, high returns or rushed into making a decision, you’re most probably dealing with a fraudulent scheme or, at best, an excessively risky investment.”

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The AMF also warns prospective ICO issuers that these transactions can often come under securities laws.

“Businesses that plan on issuing cryptocurrencies or tokens must understand and meet their obligations under securities laws. In particular, issuers and sponsors could be subject to prospectus and registration requirements,” it says; adding that issuers should consider the staff notice issued last year by the Canadian Securities Administrators (CSA) to determine how securities laws may apply to a proposed offering,” the alert says.