Dubai Issues Public Warning Against ICOs, Joining Global Wave of Regulators

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Cointelegraph | By Lisa Froelings | September 14, 2017

Dubai Financial Services Authority (DFSA) has issued a public warning against initial coin offerings (ICOs) to investors.

DFSA warning

The DFSA has warned the public that some types of offerings, including ICOs, should be regarded as high-risk investments. Those include offerings that are made on a cross-border basis.

The move follows similar warnings issued by financial regulators, which include agencies from China, Singapore, Canada, Malaysia and the US, among others. The Dubai regulator is concerned that ICOs could be marketed to inexperienced investors who may seek exposure without carefully weighing the risks.

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"The DFSA wishes to highlight that these types of product offerings, and the systems and technology that support them, are complex. They have their own unique risks, which may not be easy to show or understand; such risks may increase where offerings are made on a cross-border basis. These offerings should be regarded as high-risk investments”.

One distinction of DFA to other countries who allow cryptocurrencies is the special status of the Dubai International Financial Centre.  DFSA "does not currently regulate these types of offerings" nor is able to issue a license to firms to offer such products or services within that special economic zone within Dubai.

Crypto on the move

In August this year, Farad, a Malaysian company, launched its Farad cryptoken at a hotel at the Dubai International Financial Centre. Investors can buy a Farad cryptoken, which is claimed to be backed by the manufacturing of latest ultra-capacitors that entrepreneur Elon Musk has described as the future of energy storage.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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