CMA warns against buying local digital currency offerings
The Capital Markets Authority has cautioned Kenyans on the dangers of participating in initial cryptocurrency coin offerings (ICOs) citing high risk of exposure to fraud.
The CMA is the second financial regulator after the Central Bank of Kenya (CBK) to issue caution against cryptocurrencies, reminding investors that they have no fall-back in case of loss since neither regulator has oversight on the Internet-based digital currencies.
The capital markets regulator’s warning comes at a time when a local group is selling a Kenyan developed digital currency known as Nurucoin, which the CMA has not approved.
The CMA says that its caution is based on the wider risks in coin offerings identified by the International Organisation of Securities Commissions (IOSCO) — of which it is a member — that include potential for fraud, cross-border distribution risks, information asymmetry on the risks, costs and returns and liquidity risks when one wants to exit the investment.
The Capital Markets Authority has cautioned Kenyans on the dangers of participating in initial cryptocurrency coin offerings (ICOs) citing high risk of exposure to fraud.
The CMA is the second financial regulator after the Central Bank of Kenya (CBK) to issue caution against cryptocurrencies, reminding investors that they have no fall-back in case of loss since neither regulator has oversight on the Internet-based digital currencies.
The capital markets regulator’s warning comes at a time when a local group is selling a Kenyan developed digital currency known as Nurucoin, which the CMA has not approved.
The CMA says that its caution is based on the wider risks in coin offerings identified by the International Organisation of Securities Commissions (IOSCO) — of which it is a member — that include potential for fraud, cross-border distribution risks, information asymmetry on the risks, costs and returns and liquidity risks when one wants to exit the investment.