Tue, 30 May 2023

COLOMBO, March 29 (Xinhua) -- Sri Lanka's central bank on Wednesday warned the public about significant risks associated with using and investing in cryptocurrency as financial scams increase.

Issuing a press release, the central bank said crypto-trading is widely promoted by certain entities as a profitable investment.

The central bank has received a number of complaints that members of the public have incurred heavy losses on their crypto-investments and in certain instances have also been subject to financial scams conducted through crypto-related schemes.

The central bank said they have highlighted the significant financial, operational, legal and security-related risks as well as customer protection concerns created by cryptocurrency in 2018, 2021 and 2022.

The central bank reminded the public that cryptocurrencies are unregulated investment instruments that are not recognized as an asset class in Sri Lanka and that cryptocurrencies are not considered legal tender in Sri Lanka.

There are no regulatory safeguards relating to their usage in the country and given that cryptocurrency operates through informal channels, it does not contribute to the national economy and can also cause a loss of valuable foreign currency to the country, the central bank said.

The central bank said it has not issued any license or authorized any individual or business to operate schemes involving cryptocurrency, and has not authorized any Initial Coin Offerings or any variant of it, cryptocurrency mining operations, cryptocurrency exchanges, deposit-taking or custody services related to cryptocurrency or any cryptocurrency investment advisory service.

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