Malaysia Issues Cease and Desist Order to Copycash ICO
The Malaysian financial regulator has issued an order to the team behind an Initial Coin Offering (ICO) to halt any operations in the country. This is just another example of how authorities in different regions are trying to limit access to ICOs from the investing public under their jurisdictions.
Malaysia Says No to ICO
The Securities Commission Malaysia (SC) has announced on Tuesday that it directed the Copycash Foundation to immediately cease and desist of all its proposed activities, including a purported plan to launch an ICO on 10 January 2018.
This SC directive covers all activities as described in Copycash Foundation’s white paper for the ICO, including any roadshows, seminars or promotional events related to the scheme in Malaysia. The commission says that the order was issued following an inquiry after it found that there is “a reasonable likelihood that disclosures in Copycash Foundation’s white paper and representations to potential investors will contravene relevant requirements under securities laws.”
Judging by its website, the forex and cryptocurrency social trading platform Copycash seems to be geared toward Chinese investors more than anything else. Considering this, the Malaysian directive might not affect it at all. News.bitcoin.com has reached out for comment and will update when it arrives.
The SC also advised investors to be cautious of the risks of fraud and exercise due diligence before participating in ICO schemes, beyond this particular one. The Malaysian commission says that, while it “continues to facilitate use cases of digital assets in the capital market, it remains vigilant in monitoring ICO schemes given the heightened risks, and will not hesitate to take action where necessary.”
Back in September 2017 the SC issued an official statement addressing the potential risks associated with investing in any ICO. The issues mentioned include the difficulty to “verify the authenticity of” an ICO, challenges regarding “the recovery of invested monies may be subject to foreign laws or regulations” in the event that ICOs are based outside of Malaysia, the potential for “digital tokens traded on a secondary market” to “give rise to risks of insufficient liquidity or volatile and opaque pricing”, and the absence of regulation and “legal protection for investors”. The SC also mentioned concerns regarding money laundering and terrorist financing risks.
Should regulators have a say in what ICOs people can invest in? Share your thoughts in the comments section below!
Images courtesy of Shutterstock.