The financial regulator of Dubai, the Dubai Financial Services Authority has become the latest global regulator to speak out about the risks of ICOs, or initial coin offerings.

The model, which sees companies create and issue their own cryptocurrency tokens as a mechanism for raising capital, has attracted the ire of a growing number of financial regulators worldwide, pointing to the risks and uncertainties caused by a lack of regulation in the space.

Now, the DFSA has leant its voice to the argument, warning about the ‘unique risks’ posed by investing in this space. Notably, the agency also said these risks emerged because the space was ‘not yet’ regulated, which is being interpreted as an indication of their future intentions.

In doing so, they join agencies in the US, Canada, Russia and others worldwide in highlighting the dangers inherent in ICO investments.

According to a statement from the DFSA, the only way investors should view ICOs in the current climate is as high-risk investments.

“The DFSA wishes to highlight that these types of product offerings, and the systems and technology that support them, are complex. They have their own unique risks, which may not be easy to identify or understand; such risks may increase where offerings are made on a cross-border basis. These offerings should be regarded as high-risk investments.”

ICOs have become increasingly popular in 2017, with nearly $2 billion raised through the mechanism to date. Investors buy in to ICOs on the expectation of future value, which regulators have likened to more traditional, but regulated, securities.

Social messaging giant Kik has become the latest to launch an ICO, with their public offering going live this week, after securing $50 million in private funding from institutional investors.

Some have suggested that as the first mainstream, high profile company to choose this model of funding, the Kik ICO could inspire a new wave of activity around investing in crypto-tokens.

For the time being, there is no suggestion that the DFSA plans to imminently regulate, or legislate around ICOs. However, as an early trailblazer in the space, few would doubt the commitment of the authorities in Dubai to tackle the perceived problem head on.

The statement stopped short of repeating the suggestions from the SEC, which held that some ICOs could in fact be securities, a move which cast doubt over the legitimacy of the legal position of some ICOs.