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Slovenia’s Financial Watchdog Warns of Cryptocurrency, ICO ‘Risks’

Last Updated March 4, 2021 5:00 PM
Samburaj Das
Last Updated March 4, 2021 5:00 PM

Slovenia’s financial watchdog has issued a warning to retail investors in cryptocurrencies like bitcoin alongside a caution to ICO participants in the country.

The Financial Stability Board, a macro-prudential authority comprising of a number of supervisory authorities including Slovenia’s central bank, finance ministry and the securities and insurance regulators of the country, has warned citizens that cryptocurrencies like bitcoin remain unregulated in the country.

The central bank revealed that awareness and interest in cryptocurrencies from the public had grown “very much”, particularly in seeing decentralized currencies as store of value investments.

According to a statement reported by Reuters , the watchdog stated this week:

Investors in virtual currencies…have to take into consideration whether risks are in line with their personal preferences and investment goals.

The central bank also said the decentralized nature and the lack of an issuing authority with cryptocurrencies afford no consumer protection guarantees by the central bank or other state bodies.

The watchdog is also taking a similar stance to initial coin offerings (ICOs), a radical new form of fundraising wherein startups gain capital via cryptocurrencies like bitcoin and ethereum’s ether by selling their own crypto tokens to investors.

As such, ICOs are not regulated nor controlled in Slovenia and the FSB said participants should limit their investments “in the amount that would not leave them too exposed.”

The wait-and-see approach contrasts to the total hardline regulation against ICOs in China and Korea where ICOs are currently banned altogether. Elsewhere, countries and regions including Hong Kong, Abu Dhabi, Taiwan, Thailand, Australia and the United States, among others, have all issued or are working toward guidelines that allow ICOs to participate in their societies.

Bank of Slovenia image from Shutterstock.