UAE financial regulators reminded investors to be wary of ICO risks

nStorming comment: The UAE’s impression in the cryptocurrency and blockchain landscape has always been positive and optimistic, but that does not mean that its authorities will ignore the potential risks and negative aspects of this new thing. At present, the UAE Securities and Commodities Administration has issued a warning to local residents against the risk of investing in ICOs, reminding them that they will not be legally protected by this institution if they suffer losses in the event of being deceived. However, some government agencies in the UAE have begun to consider legal supervision of ICO and other activities.n
nTranslation: Inan
The UAE’s financial regulator has warned local residents about the risks of ICOs.n
The notice, released by the Securities and Commodity Administration of the United Arab Emirates (SCA) on February 4, is designed to alert local residents to the risks of investing in token financing activities such as ICO and tokens.n
The SCA noted that these risks may stem from the unverified or misleading presentation of the project and the significant price fluctuations that occur after the tokens are traded in the secondary market.n
The SCA further emphasizes that as it currently does not regulate or monitor any ICO project, investors can not be afforded legal protection in the face of such fraud.n
In addition, the agency warned that investing in overseas ICO projects may also be risky, depending on whether the market is formally regulated.n
SCA said:n
n”ICO may be carried out abroad, so it is difficult to verify that it is subject to foreign laws and regulations and it is extremely difficult to recover investors’ funds when the ICO fails.”n
nThe announcement of this notification has added SCA to the ranks of other financial regulators worldwide that issue formal warnings to residents on the risks of ICO investments.n
The Abu Dhabi government in the UAE has revealed in October last year that it will guide the field and try to apply the anti-money laundering and KYC rules to the ICO.n

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