Dubai Financial Regulator Issues ICO Warning

Posted in: Archive
Published:
September 18, 2017 2:32 PM UTC

A financial markets regulator in Dubai has joined a growing list of authorities around the world to issue a warning on initial coin offerings (ICOs).

The Dubai Financial Services Authority (DFSA), the financial regulator of a purpose-built international financial free zone in Dubai, has drawn attention to token sales by urging investors to be wary of ‘unique risks’ inherent in ICOs.  “These offerings should be regarded as high-risk investments” the regulator stated.

Notably, the DFSA added that it had not regulated nor licensed any entities in the financial zone. It wrote:

The DFSA would like to make it clear 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 statement also recommended potential investors to practice due diligence with caution to understand the risks involved in a token sale. Notably, however, the statement made no mention of regulating token sales as a method of fundraising. A recent notice from Thailand’s securities regulator pointed to such a possibility wherein the authority saw the potential of ICOs as a significant new form of raising finance for new startups.

The DFSA warning comes despite the financial regulator adopting a FinTech-forward agenda to foster and encourage innovation in financial technologies in the region.

Elsewhere, regulators from Hong Kong and the United States have released statements about classifying ICOs as securities, a move which would subject them to securities laws and regulations by authorities.

Featured image from Shutterstock.

Last modified: May 21, 2020 9:14 AM UTC

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Samburaj Das @sambdas

Samburaj is the Chief Editor of CCN.com, one of the earliest and foremost publications covering blockchain, cryptocurrency, and financial technology news. He has authored over 2,000 articles for CCN.com. Reach him at samburaj@ccn.com. Visit his LinkedIn profile here or his Muck Rack profile here.

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