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'NOT REGULATED BY AUTHORITY'

DFSA ...not regulating cryptocurrency offerings.
Image courtesy: Wam

DFSA warns on cryptocurrency offerings

DUBAI, September 14, 2017

The Dubai Financial Services Authority (DFSA) has warned potential investors on risks involved in cryptocurrency offerings and said the authority does not currently regulate these types of product offerings or license firms in the Dubai International Financial Centre, (DIFC) to undertake such activities.

The DFSA highlighted that these types of product offerings, and the systems and technology that support them, are complex. They have their own unique risks, which may not be easy to identify or understand. Such risks may increase where offerings are made on a cross-border basis. These offerings should be regarded as high-risk investments, it said.

In a statement, DIFA said it wishes "to draw investors’ attention to certain new and evolving online offerings. These product offerings tend to involve the issuance of some form of virtual coin, token or other symbol of virtual currency in return for payment of a subscription price. They are often referred to as cryptocurrencies. These types of offerings are increasingly being made available to the public by way of an initial fundraising event referred to as an ‘Initial Coin Offering,’ ‘Initial Token Offering’, or ‘Token Sale’.

"The tokens or coins involved in these product offerings are structured in different ways and linked to different business propositions. For example, some are seeking to develop a new digital platform or provide access to an online platform, others offer an opportunity to invest in properties, businesses and assets, with promises of certain benefits or monetary returns, others are backed by particular types of assets."

Before engaging with any persons promoting such offerings in the DIFC, or making any financial contribution toward such offerings, the DFSA urges potential investors to exercise caution and undertake due diligence to understand the risks involved, it said. - TradeArabia News Service
 




Tags: Dubai | DIFC | DFSA | cryptocurrency |

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