Following the recent warnings issued by global financial regulators against initial coin offerings (ICOs), the Dubai Financial Services Authority (DFSA) has also cautioned the public against this new method of fundraising.
The DFSA said:
“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.”
It also emphasized 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.
“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,” the DFSA added.
In the past couple of weeks, global regulatory authorities, including the Securities and Exchange Commission (SEC), the Bank of Russia, the UK Financial Conduct Authority (FCA) and the Securities Commission Malaysia (SC) have warned investors against potential ICO related risks. China, on the other hand, called an immediate ban of all ICO activities. In addition, the SEC, the Canadian Securities Administrators (CSA), the Monetary Authority of Singapore (MAS), and Hong Kong’s Securities and Futures Commission (SFC) have issued guidance on how ICO tokens may be subject to securities laws.
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