Kazakh National Bank issues alert on cryptocurrency boom

ASTANA – The Kazakh National Bank recently published an alert concerning the risks of using cryptocurrency.

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“Advertising agencies have recently been actively involved in promoting investments in cryptocurrencies. Such websites promise high earnings at minimum costs and there’s an information about the creation of local cryptocurrency with the participation of private individuals as well as information on the benefits of using cryptocurrency,” said a statement released Jan.18.

The financial institution warns citizens and legal entities about the high risks that arise when acquiring and conducting operations with cryptocurrencies.

First, the activities of individuals on the distribution of cryptocurrencies, including the Initial Coin Offering (ICO) initial placement of coins (tokens), are not regulated or controlled by the state, which means a lack of legal protection of citizens participating in these transactions.

Second, there are no guarantees of safe investments as the cryptocurrencies/tokens are not involved with assets, have no real value and do not contain obligations of any persons to return money.

Third, there is a risk of using fraud schemes similar to financial pyramids to attract money by spreading the coins and ICO placement of tokens and manipulating the prices for cryptocurrencies to obtain quick profits by unscrupulous entities.

Fourth, anonymous market and cross-border use of cryptocurrencies create an opportunity for their use in criminal schemes for the laundering of proceeds from crime and the financing of terrorism.

Fifth, cryptocurrencies cannot be considered and used as a financial instrument (asset) with currency value and cannot be accepted as means of payment, including electronic money.

Individuals involved in such schemes or planning to conduct operations with cryptocurrencies bear risks and responsibility for their actions on their own.

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