Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

Finance

CMA cautions public on pre-sale offers of digital coins

In a statement, CMA says it has not licensed any initial coin offering adding that ongoing offerings are unregulated and speculative investments with considerable risk to the investor./FILE

 NAIROBI, Kenya, Feb 21 – The Capital Market Authority has warned the general public against investing in digital tokens marketed as pre-sale offers before they are launched on public exchanges.

In a statement, CMA says it has not licensed any initial coin offering adding that ongoing offerings are unregulated and speculative investments with considerable risk to the investor.

Initial Coin Offering (ICO) involves the creation of digital tokens using distributed ledger technology and subsequent sale to investors.

Risks involved include a heightened potential for fraud where some issuers could seek to perpetrate fraud against investors and liquidity risks where the trade may give to opaque and volatile pricing.

“As the issuer may also be operating the initial coin offering (ICO) from outside the investor’s jurisdiction, following the money in the event of a collapse of ICO as well as recovering invested funds, may prove extremely difficult in practice.”

The statement comes at a time when there has been an increased interest in virtual currencies as an alternative investment option with several Kenyan entities floating ICOs.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...