CB of Sri Lanka warned people about dangers associated with investing in cryptocurrency


The Central Bank of Sri Lanka (CBSL) has warned people about the dangers that accompany investing in digital currencies, urging them not to get involved in crypto trading and ICO.

CBSL has recently become aware of a large number of claims from those who have suffered losses due to investments in digital assets or have been defrauded by cryptocurrency fraudsters. The CBSL has previously pointed out the financial, operational and legal dangers of investing in crypto-assets, as well as risks with regard to user security and privacy. The central bank noted that these risks are already a reality, pointing to the collapse of numerous cryptocurrency companies in 2022.

CBSL stated that digital currencies are not regulated investments and are not recognised as an asset class. Crypto-assets do not have legal tender status and are not currently regulated. The central bank subsequently recalled that under the 2017 Foreign Exchange Act, debit and credit cards could not be used for cryptocurrency transactions. Moreover, it was pointed out that digital assets do not contribute to the growth of the country's economy, but instead contribute to the depreciation of its official currency. In addition, a warning was issued regarding the growing number of fraudsters temptingly offering high returns on crypto-investments in various media and on the Internet. Thus, residents are warned against participating in such cryptocurrency schemes.

The organisation has clearly stated that it has not issued any permits to people or companies to work with digital assets, create initial coin offerings (ICO), mine or offer any cryptocurrency services, be it custodial services or advice related to investments in digital assets.

The Central Bank of Sri Lanka said last month that the government would not accept bitcoin due to the fact that the introduction of decentralised cryptocurrencies could worsen Sri Lanka's financial difficulties.

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