Malaysia’s financial-market regulator cautioned investors about potential risks involved in the burgeoning public offerings of crypto currencies – the latest public warning is following a string of similar in Asia.
The regulator reminded investors in initial coin offerings (ICO) to seek legal advice to address doubts on the legitimacy of such schemes, with the terms and features of ICOs differing substantially from case to case.
«Investors should take note that scheme operators may not have a presence in Malaysia,» the Securities Commission of Malaysia (SC) said. «It would be difficult to verify the authenticity of the scheme and the recovery of foreign-invested monies may be subject to foreign laws or regulations.»
Fraud and Money Laundering
The SC added that since some of the ICOs operate online and may not be regulated, investors may be exposed to heightened risks of fraud, money laundering and terrorism financing.
Regulators across Asia have been going on record warning investors keen on ICOs of the potential dangers. Last month the Monetary Authority of Singapore (MAS) issued an investor warning, advising the public to exercise due diligence to understand the risks associated with ICO's and investment schemes involving digital tokens.
Chinese Warning
In one of the strongest actions The People’s Bank of China banned fundraising by way of token-based digital currencies, deeming the practice illegal.
The Hong Kong Securities and Futures Commission (SFC) quickly followed issuing their own notice urging investors to be mindful of potential scams as well as the investment risks involved in ICOs.
