The Securities and Commodities Authority warned investors of all fund-raising activities based on investments in encrypted digital assets (such as currencies and symbolic instruments) that may be practiced in one way or another within the UAE, whether referred to as “Primary Tools for Avatar”.
The Authority said in a circular issued yesterday to investors that these assets are being sold to investors through participation in offering operations or in other ways in exchange for digital currencies. The terms and features of these products or instruments vary greatly in each case. Or interest (if any) received by the investor.
Noting that these products or instruments involve a very high level of speculation and characterized by large fluctuations in prices. The Authority confirmed that some of these products are not subject to the control of any regulatory or regulatory body, and therefore are at risk of fraud and fraud.
These products may be exported by entities operating outside the country and subject to unverifiable foreign laws and regulations. In practice, it may be very difficult to trace or recover funds invested in the event of failure or failure of the digital tool. She pointed out that the circulation of these issues and tools in the secondary markets are subject to the method of pricing is unclear and volatile and does not have sufficient liquidity.
“Many investors – especially individual investors – may not be able to understand the risks, costs and expected returns arising from their investment in these instruments,” she said.
The Securities and Commodities Authority (SCA) has confirmed that the said instruments are not recognized by the TRA and are not regulated, monitored or supervised at present and that there is no legal or regulatory protection for this type of investment. The TRA cautioned investors that the consequences of engaging in this type of investment The activities are the responsibility of the investor alone, and he is fully responsible for his decision in this regard.
The TRA called upon all the issuers of the mentioned products or digital tools, and the intermediaries involved in the brokerage activity or advising them, as well as the platforms for their circulation, to seek advice from the competent legal authorities and relevant regulators to ensure compliance with all applicable laws and regulations.
The Commission has recently set up a working group to facilitate the implementation of financial technology initiatives and follow-up on developments in this area. It has assigned e-mail firstname.lastname@example.org to receive questions and answer inquiries regarding the field of financial technology.