- 4th April 2018
- Posted by: Lendo
- Category: ICO
- Technology outruns regulation
Joseph Borg, Director of the Alabama Securities Commission, says the first thing you need to know about the Fintech space is “technology always outruns regulation.” In an interview with The Merkle he explains the positives of the new technology that brings finance and technology together, but warns that its can be a dangerous place for those who don’t really understand it and who may throw caution to the wind.
- Who is at risk?
He expanded on this point, when asked who was at most risk from fraud, which is one reason behind regulatory authorities increasing interest in Fintech. He said, “Definitely the millennial generation. Why? Because they grew up with technology. There is a [deep] trust in that tech, because that’s what they know, which is well-founded. But I think they also don’t have this “fear of loss of privacy,” and because of that trust, sometimes they don’t see the potential for fraud, whether it’s hype or not.”
But, he also added that fraudsters are more likely to target Baby Boomers, because they have money and equity in property.
- Evaluate the hype
His third point is about the hype surrounding Fintech. In his view any new technology is hyped and what everyone should be looking out for it’s the “too good to be true” scenario. His advice is: “If you’re really geared for this, and you think this is something you want to try—once you do your background, if you want to invest, take your money and say to yourself, ‘If I went to Vegas today, and put this on one bet, red or black, and I bet red, and it came out black,’ could I walk away and say, ‘Oh well, that was fun,’ and go to sleep at night? Can you still sleep at night, knowing you lost it? If yes, then no problem.”
- Read the strategy carefully
Focus on what a project ‘will do’ and ‘could do’ before making a decision. Watch out for projects guaranteeing unrealistically high returns and instead look for projects that are licensed, or applying to be, and like Lendo believe that compliance with regulations is the best way forward.
- Do the due diligence
Whether you are an individual investor or a Venture Capital firm, get advice from people who understand the technology and those who are expert in the existing regulations for securities and commodities.
And that’s the advice on Fintech projects from Joseph Borg folks.