UAE Warns Investors to Take All Risks in ICOs

A new document released by the Securities and Trading Authority (SCA) of the UAE (United Arab Emirates) on Sunday, February 4, warns investors of the risks ofICO.

In the document, SCA emphasizes that investors participating in ICO fundraising campaigns must bear all associated risks, as digital token-based fundraising activities are not regulated by the United Arab Emirates and do not provide legal protection from fraud cases.

The major risks, as SCA points out, include the irregularity of ICO tokens on secondary markets. Also, these risks are caused by the ignorance of the potential costs and gains shared by most retail investors, along with misleading or unaudited details in ICO offerings.

SCA noted the risks involved in investing in foreign ICOs and that these donor communities should verify regulatory compliance and said the money deposited leaving the UAE can be difficult to monitor.

The government warned its citizens of the risks of ICOs for the second time after October 2017. Abu Dhabi’s Financial Services Regulatory Authority (FSRA)

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