Dubai Financial Services Authority The Latest To Warn Against ICOs

The Dubai Financial Services Authority (DFSA) warned investors on Wednesday (Sept. 13) that initial coin offerings (ICOs) are complex and risky, joining a growing list of governments to do so.

In a statement on its website, the DFSA said ICOs and the systems and technology that support them are complex, possessing their own unique risks which may be hard to identify and understand. What’s more, the DFSA said, investors should consider ICOs high-risk investments.

“The DFSA would like to make it clear that it does not currently regulate these types of product offerings or license firms in the Dubai International Financial Centre (DIFC) to undertake such activities,” the DFSA said in a post on its website. “Accordingly, before engaging with any persons promoting such offerings in the DIFC, or making any financial contribution toward such offerings, the DFSA urges potential investors to exercise caution and undertake due diligence to understand the risks involved.”

The DFSA is joining Russia, China, the U.K. and the U.S. in warning investors about ICOs, which are currently garnering a lot of attention around the globe. The warning is also backed by JPMorgan Chase & Co. chief executive officer Jamie Dimon, who was quoted as calling Bitcoin a “fraud” at a recent investor conference in New York.

“The currency isn’t going to work,” Dimon said on Tuesday (Sept. 12). “You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”

Dimon also said any JPMorgan traders working with the cryptocurrency would be fired on the spot for two reasons: It’s against the company’s rules, first of all, and secondly, Dimon feels it is “stupid.” His comments come as the price of Bitcoin has quadrupled since December and at one point flirted with a new high of $5,000.

“Don’t ask me to short it,” Dimon said, according to Reuters. “It could be at $20,000 before this happens, but it will eventually blow up. Honestly, I am just shocked that anyone can’t see it for what it is.”