New Warning Against Digital Coins Issued

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The Securities and Exchange Commission of Cambodia (SECC) yesterday warned the public against investing in cryptocurrencies such as Bitcoin, arguing that there is no regulation in place to manage the use of digital coins.

Bitcoin continues to face heavy criticism in the kingdom. AFP

SECC’s statement comes a month after the National Bank of Cambodia (NBC) issued a similar warning.

According to SECC’s statement, investors should be wary of digital coins and ignore a “global campaign” now in full swing to promote the use of Bitcoin, Ethereum and the like.

The new financial instrument has not been properly studied and its trading bears high risk, SECC said.

“We would like to appeal to the public to be very careful and avoid any connection to such digital trading. You will be fully responsible for any financial loss bore while trading in cryptocurrencies.”

In December, NBC’s director general Chea Serey said there are a handful of companies operating in the kingdom to con shop owners into using digital coins for everyday financial exchanges.

“Digital coins are not legal in Cambodia, and we don’t recognise or accept them as financial instruments,” Ms Serey said.

“They entail a high level of risk. We, the central banking authority, have yet to understand those risks, so we ask the public to not accept digital coins and stick to regular currencies.”

The director of the NBC also said all commercial banks in the kingdom have been instructed not to transact in cryptocurrencies.

“If the public does not heed our warning and choose to receive or accept digital coins, they will lose their money because banks won’t accept them.”

In its statement, SECC clarified that its recent memorandum of understanding (MoU) signed with Camnext Global Ltd seeks to enhance cooperation in the fintech – or financial technology – sector, and that the agreement does not mean they approve the use of digital coins.

“The MoU aims to promote research on different digital financial products. We seek to clearly define the risks and prepare the regulation needed to properly manage new financial instruments in the capital market to increase efficiency, security and transparency,” SECC said.

“So far, we have not issued any licences allowing companies to trade with digital currencies.”

Last month, NBC rejected claims that they had cooperated with firm Chaintope to launch K-coin, a cryptocurrency.

“We condemn to the highest extend any person who uses NBC’s name to disseminate such false information and we will take legal action if necessary.

“NBC reaffirms that we have never allowed the purchase, sale or circulation of any form of cryptocurrency, including the mentioned K-coin,” NBC said in a statement.

This article was originally published in the Khmer Times.