Dubai:
The Dubai Financial Services Authority (DFSA) said on Wednesday it does not regulate cryptocurrencies or the initial fund-raising event popularly called as Initial Coin Offerings.
The regulator said in an emailed statement that it does not license firms in the Dubai International Financial Centre (DIFC) to undertake such activities.
“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,” said the DFSA, adding they may be regarded as high risk investment.
Bitcoin or cryptocurrencies have been gaining prominence because of the swift rise in prices that it has witnessed in the past one year or so. The returns have trounced those made from the other asset classes like equities, currencies, bonds, commodities among others.
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.
“Accordingly, 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 added.
