Dubai Issues Public Warning Against ICOsbr>
The Dubai Financial Services Authority (DFSA) has issued a warning on initial coin offerings (ICO). The move follows similar warnings issued by global financial regulators, which include agencies from China, Singapore, Canada, Malaysia and the US, among others.
The DFSA warned the public that some types of offerings should be regarded as high-risk investments. Those include offerings that are made on a cross-border basis. The Dubai regulator is concerned that ICOs could be marketed to inexperienced investors who may seek exposure without carefully weighing the risks.
“The DFSA wishes to highlight 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.”
The regulator said that it 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 urged potential investors to exercise caution and undertake due diligence to understand the risks involved before engaging with any entities promoting such offerings.