Thursday 14, September 2017 by Georgina Enzer

DFSA warns investors to be wary of cryptocurrencies

The Dubai Financial Services Authority (DFSA) has warned investors of the unique risks of cryptocurrencies, and stated that these offerings are not currently regulated by the DFSA.

The DFSA stated that cryptocurrency 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.

“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,” read the statement. “The DFSA would like to make it clear 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. 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.”

The DFSA encourages potential investors to refer to the list of regulated Firms and Authorised Individuals licensed by the DFSA which is available on the DFSA's PUBLIC REGISTER. Additionally, the DFSA issues alerts about scams and other potentially fraudulent practices on its website. All alerts issued by the DFSA can be accessed by going to: ALERTS. The DFSA has also issued warnings and guidance about the common types of scams perpetrated on consumers. For more information, please go to: HOW TO AVOID BEING SCAMMED.



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