Financial Regulatory Commission

05/14/2021 | Press release | Archived content

STATEMENT

Products and services based on blockchain technology are gaining momentum in the global market and the traditional financial system is evolving rapidly. Consumers now have access to decentralized, low-cost, financial products and services. However, it is important to remember that these advantages are often associated with some increased level of risk.

To manage and reduce such risks, international governments, central banks, and financial regulators are preparing certain types of regulations - regarding virtual asset services - one of which is concerns public warnings. For example, in March 2021, the European Union's Securities and Markets Authority stated,

'Cryptocurrencies are widely used in high-risk, unpredictable and fraudulent activities, and consumers are fully responsible for their losses when buying or investing. Most virtual asset services are still unregistered and unregulated, so it is not possible for financial regulators to provide protection and guarantees to citizens'.

The European Union is in the process of drafting an independent regulatory law in this area, and in another statement warned that the law had not yet been implemented; nor had consumer protection regulations.

The Financial Institution of South Korea - one of the top Asian countries in terms of foreign trade and financial services - continues to issue alerts to the public, regarding the operation of virtual assets. Information on the victims of this activity have been posted on websites.

When participating in activities involving virtual assets, members of the public must be careful and protect themselves (and others) from exposure to risks. Precautions include refusing to invest in high-risk products and the services of unlicensed entities. Citizens will be personally liable in the event in case of any damage.