The Capital Markets Authority has warned investors against taking part in initial coin offerings.
The authority says the ongoing offerings are unregulated and speculative investments with considerable risk exposure to the investor.
The Capital Markets Authority (CMA) is pushing for creation of a special unit comprising financial sector watchdogs to regulate the use of cryptocurrency, citing high risks associated with the Internet-based digital currencies.
Already, CMA has warned investors against taking part in initial coin offerings (ICOs).
The authority says the ongoing offerings are unregulated and speculative investments with considerable risk exposure to the investor.
“There is need for regulators to devise a common approach towards handling issues revolving around cryptocurrencies and initial coin offerings.
“A joint work group by financial sector regulators could be put in place to tackle issues around cryptocurrencies/ICOs,” CMA said in its latest Capital Markets Soundness Report.
The authority said regulators need to communicate willingness to accommodate financial technology to remove the perception that they are hesitant to appreciate new innovations.
“There is room to develop international regulatory principles for crypto assets including ICOs. The goal should be to harness the potential of the underlying technology,” said Luke Ombara, director, regulatory policy and strategy.
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