Malaysia`s statutory securities regulator has issued a public statement saying that investors should be cautious when participating in ICO (initial co
Malaysia`s statutory securities regulator has issued a public statement saying that investors should be cautious when participating in ICO (initial coin offering) funding.
In a statement, Securities Commission Malaysia (SC) has advised investors to consider the potential risks involved in “digital token based fundraising activities/investment schemes”, as cryptocoinnews.com reported this week.
Mentioning that investors should be mindful, SC refers to a list of potential risks:
- Scheme operators may not have presence in Malaysia and it would be difficult to verify the authenticity of the scheme and the recovery of invested monies may be subject to foreign laws or regulations
- Some ICO schemes and the parties involved to operate online and may not be regulated, investors may be exposed to heightened risks of fraud, money laundering and terrorism financing
- Digital tokens traded on a secondary market may give rise to risks of insufficient liquidity or volatile and opaque pricing
- The structure of these ICO schemes might limit the legal protection and recourse for investors against scheme operators
“As the terms and features of ICO schemes may differ in each case, investors who wish to engage or invest in ICO schemes are reminded to seek legal or other professional advice if there are doubts on the legitimacy of these schemes.”, as the securities commission added in their public release.
The commission`s statement follows the ICO ban in China and the recently published warning by Russia`s central bank. Regulators from Singapore, Hong Kong and the United States have also issued warnings regarding ICOs.