United Arab Emirates Financial Authority Criticized ICO
February 6, 2018
The UAE’s Securities and Commodities Authority has made public a note of warning for its people which tells of the ICO-related risks.
The released circular letter cautions the UAE citizens of the risks when investing into token-issuing campaigns like presale and ICO.
Among those the authority mentions high token price volatility after they start being traded at the secondary market as well as inaccurate information about some projects that may turn misleading for would-be investors.
The regulator has also made it a point that law protection for investors affected in case of fraud is out of the question as it neither regulates nor monitors a single ICO-conducting project.
What is more, the department has warned against the risks of participating in cross border ICO that may well be jeopardizing to the extent this industry is being regulated in specific country.
“ICOs may be issued abroad, and therefore are subject to foreign laws and regulations that can be difficult to verify. Tracking and recovering funds in case of ICO collapse may prove to be extremely difficult in practice”, as the letter states.
The UAE have joined the countries with financial regulatory bodies to have warned officially against ICO-related risks. Suchlike cautions have already been released earlier in the USA, Israel and other countries.
Last year the Abu Dhabi authorities claimed, the ICO procedure was conferred the same status as securities so every campaign of this kind is to be considered on a case-by-case basis.