Arab countries have started looking for new options to make cryptocurrency and blockchain usage part and parcel of their financial ecosystem. In fact, the UAE’s Securities and Commodities Authority (SCA) has approved a plan to regulate initial coin offerings (ICOs) and recognize them as securities, Arabian Business reported. There has been a lot of debate around the world over whether cryptocurrencies are actually securities, but it seems that the UAE is now decided on this point.
Sultan bin Saeed Al Mansouri, minister of economy and chairman of the SCA, said the decision was made after the securities regulator completed its review on best international practices regarding this sector. The approved plan involves a set of mechanisms which are part of a wholly integrated project to regulate digital securities and commodities.
The resolution will go into effect as soon as it’s published in the UAE’s Official Gazette.
The news comes several months after the SCA warned investors in February to be cautious about digital, token-based fundraising activities, which include ICOs as well as token crowd sales.
At the time, the securities regulator pointed out that ICO terms and features are case specific, as is the nature of rights and interests acquired by investors. The SCA noted that ICOs are highly speculative, given that cryptocurrency market prices are highly volatile.
The SCA also called upon digital token issuers to seek legal and regulatory advice to ensure compliance with applicable laws and regulations.
Interestingly, what many regard to be the world’s biggest cryptocurrency fraud, BitConnect, had a link in Dubai, following reports that its owners had rented hugely expensive offices in the world’s tallest building, the Burj Dubai, before disappearing after the price of the cryptocurrency literally went to zero.
BitConnect is infamously known as the cryptocurrency investing and lending platform that lured thousands of investors into pouring millions of dollars into its BCC coin, promising high returns. As with most of these Ponzi type scams, the coin fell spectacularly and several thousand investors were ruined, losing millions.
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