The backlash against ICOs for new cryptocurrencies has taken another dramatic turn. Capital Group has amended its policies to prohibit its associates and their family members from investing in ICOs and IPOs. The new policy from one of the oldest investment groups in the United States took effect on April 19, 2018 when Capital Group filed a new Code of Ethics with the Securities and Exchange Commission.
The move comes amid three straight weeks of gains in the cryptocurrency market, and it follows measures taken by Google, Facebook, and Twitter to effectively ban advertisements for ICOs. The amended rules from Capital Group provide for exceptions where IPOs of stock are concerned, but no such exceptions exist for ICOs.
Some believe that the recent measures taken against ICOs can be attributed to the SEC's announcement that it would be turning its scrutiny on hedge funds that invest in digital assets. The United States has long struggled with cryptocurrency and its place in the economy. The SEC's willingness to explore how hedge funds invest in the virtual tokens could signal increased efforts in the US to implement some type of regulation. A hallmark of cryptocurrencies like Bitcoin and Ethereum is a decentralized nature.
Other countries have also taken aim at Bitcoin and other tokens. South Korea acted in March 2018 to prohibit government officials from investing in cryptocurrency. The Asian nation contends that participation by government employees violates South Korea's law for civil servants.
While this news is not good for cryptocurrency investors, the market has shown promise after a protracted downturn in the first quarter of 2018. Bitcoin and other tokens have posted steady gains throughout April, leading some to speculate that a bull run similar to that of 2017 could be on the horizon. ICOs offer investors a chance to purchase cryptocurrencies at low prices with the hope of a significant return.