The Securities and Commodities Authority (SCA) of the United Arab Emirates has issued a warning yesterday to investors on all digital, token-based and ICOs for fundraising activities, the state news agency WAM reports.
The regulatory authority said, “…SCA has raised the alarm about all digital, token-based fundraising activities or investment schemes in the UAE, whether referred to as initial coin offerings, ICOs, initial token offerings, token presale, or token crowdsale.”
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The statement added that digital tokens are sold to investors in ICOs in exchange for cryptocurrencies. It further explained that ICO terms and features are case-specific, and so is the nature of rights and interests acquired by investors, if any, indicating that ICOs are highly speculative and highly volatile regarding prices.
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The SCA urged investors to be fully aware of the risks associated with ICO investments. It reiterated that it does not recognise, regulate, or supervise any ICO presently and that ICO investments are not offered legal or regulatory protection. It went on to say that investors involved in ICO investments are doing so at their own risk.
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The Authority called upon digital token issuers, intermediaries advising on or facilitating digital token offerings, and digital token trading platforms to seek legal and regulatory advice to ensure compliance with all the applicable laws and regulations.
SCA added that it has recently formed a fintech team assigned to facilitate implementing fintech initiatives and keeping up with the latest developments.