SEC warns on risky crypto flings

The Office of the Securities and Exchange Commission (SEC) has warned people to be cautious about investing in cryptocurrencies, which it says hold various kinds of risk.

Secretary-general Rapee Sucharitakul said investments in cryptocurrencies and initial coin offerings (ICOs) require sufficient knowledge about the matter as they carry various aspects of risk.

Those who do not understand them clearly could run into losses, Mr Rapee said.

Warnings have been given from time to time as ICOs catch on as a means of raising funds and given the current interest in cryptocurrencies, he said.

Some opportunists may float business projects by raising funds through this new technology, which is their selling point, he said, adding some people may not have clear business plans but want to use the technology to simply swindle money from people.

Those invited to invest in digital assets must study the investment thoroughly, including the assets, business operations, investors’ rights and tokens received from investment.

They should also bear in mind that some businesses may not be regulated by risk oversight authorities or have proper standards to fend off cyber security risks, he said.

Referring to the ICOs, Mr Rapee said no regulations have been rolled out to deal with the matter so investors will not be protected from damages.

ICO-funded projects are still pipe dreams and their operations bear a risk of failing to achieve business goals, he said, adding the white papers issued for ICOs are only empty promises.

According to Mr Rapee, authorities are considering laying out measures urging operators to disclose information to boost accountability as well as enabling the screening of digital assets to be sold.

If damages arise from the investment, it is unlikely the investors will be able to seek help from anyone. “If you do not understand, do not invest,” Mr Rapee said.