Egypt’s Financial Regulatory Authority (FRA) said on Tuesday that enticing investors into dealing with cryptocurrencies is considered a “form of deception that falls under legal liability.”
FRA head Mohamed Omran has warned of calls to invest in crypotcurrencies, highlighting the fact that such dealings are not regulated by any official body in Egypt and are not part of the monetary authority.
The FRA statement said Omran had cited the Egyptian stock market and Nilex, which helps medium and small companies raise capital, as two regulated possibilities for investment.
Currently, the statement added, amendments are being made to the financial markets law to regulate the foundation of futures and commodity exchanges.
“[Exchanges] other than what have been mentioned specifically [in the statement] require legislation to be practiced,” the statement said, quoting Omran.
“Although we are keen to help find an investment environment capable of attracting funds and spurring the flow of local and foreign investments, protecting participants in non-bank financial markets urges us to release a warning against fast developments the world is witnessing in what is known as the digital [currencies] revolution.”
“Mystery still surrounds these currencies amid major warnings from numerous banking and supervisory authorities against them, including the International Organisation of Securities Commissions.”
Digital currencies are not tangible and are decentralised, and do not represent an amount of gold or silver. Bitcoin, the leading cryptocurrency, is believed to be the first of hundreds of digital currencies introduced to the internet sphere, as well as being the most valuable and most widespread globally.
Due to a lack of transparency and guarantees, Omran said, there is a high probability of fraud comes with cryptocurrency dealings. “Those who deal with these currencies could lose all their funds,” he said.
The Central Bank of Egypt has more than once said the banking sector does not accredit cryptocurrencies, which have grown significantly popular over the past years.