Be extra careful, says US judge

SHAH ALAM: The Malaysian public have been advised to practise extra care and due diligence when investing in cryptocurrency investments.

Paul Grimm, a prominent United States district judge for Maryland, said it was vital for people to know that such currency was not backed by the “full faith and credit” of the government.

He said the public should carefully evaluate the risks associated with dealings in digital currencies.

“If you are looking at cryptocurrency as an investment, you should do due diligence over how the currency is valued, the value fluctuations and how to deal with risks associated with the investment,” said Grimm.

He was responding to fears of many Malaysians who are still sceptical about investing in digital currencies as they are not legal tender nor regulated by Bank Negara Malaysia.

The central bank had said the digital currency businesses were not covered by prudent market conduct standards or arrangements applicable to financial institutions which it regulated.

Grimm said people should understand how the value of the cryptocurrency fluctuatedand where an investor should buy such currencies if its value increases to receive good returns, and not otherwise.

“Cryptocurrencies are not backed by the national banking system and no regulator can step in to ‘cool it down’ or ‘heat it up’ with regulatory monitoring policy that will affect it.

“It exists in a market that is subject to fluctuations that are not controlled by a national bank with professionals,” he added.

Grimm was one of the speakers at the forum entitled “Cybersecurity in a Digital Era of Human Security”, organised by the Centre for Media and Information Warfare Studies of Universiti Teknologi Mara, here, yesterday.