Latvia’s watchdog raises alarm on growing crypto frauds

Latvia's regulatory authority, Financial and Capital Market Commission raises concerns over increased crypto frauds impersonating companies.

By · Oct 21, 2020 . 5min read

Latvia's watchdog on crypto frauds news

Financial and Capital Market Commission (FCMC), Latvia’s regulatory agency has warned against crypto frauds that are becoming incessant within its shores. The proliferation of illegal investment schemes with cryptocurrencies and digital assets sparked up these concerns by the country’s watchdog.

In a statement on Monday 19th of October, FCMC laid specifically addressed several crypto investment schemes advertisements on the internet. The watchdog called them out stating that the majority of these schemes are frauds looking to hoodwink investors. Characteristically, they offer short term with an outrageously high-interest rate.

Another grievous allegation against most of these illegal schemes Latvia’s watchdog mentioned in the crypto frauds concerns is impersonation. In the alert, FCMC mentioned that

Fraudsters tend to advertise cryptocurrency investments on the internet, sometimes using the names and images of well-known individuals or licensed companies,

Some even go as far as promising that their investment offers will get listed on highly regulated stock exchanges and listing on popular cryptocurrency exchanges. Of course, as most of them are just crypto frauds in disguise, they never meet their obligations to investors. Leaving the majority of them with worthless investments, some even with non-existent digital assets. Most are just left with bogus balances on their dashboards.

Beyond the warning alert, Latvia could stem most of these crypto frauds with regulations.

At the moment, FCMC makes it clear that it has not sanctioned the issuance and circulation of digital assets. Hence, anyone doing that and masquerading to unsuspecting investors is clearly peddling falsehood. However, although no Latvian law backs cryptocurrency issuance and circulation, some other instruments are legal. For example, the country legalises the circulation and trading of Contract for Difference (CFD) and other cryptocurrency derivative instruments.

It is, therefore in the interest of Latvia to whip up clear regulations for cryptocurrencies and digital assets to stem the growing crypto frauds that are becoming rampant within its borders.

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