Cryptocurrency offerings could be a crime

Mexican authorities warned that cryptocurrencies were risky investments and said fundraising programs could potentially violate the country's financial law
A man touches a screen of a bitcoin ATM – Photo: Ints Kalnins/REUTERS
14/12/2017
12:37
Leonor Flores
Mexico City
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Mexico's Ministry of Finance and Public Credit (SHCP), Mexico's Central Bank (Banxico) and Mexico's Banking and Securities Regulator (CNBV) warned that cryptocurrencies were risky investments and said fundraising programs known as initial coin offerings (ICOs) could potentially violate Mexican financial law.

The warning was issued in a preventive manner since there have been no initial coin offerings originating in Mexico to date, yet sale and purchase have originated abroad.

“However, depending on their specific characteristics, some ICOs that originate and are emitted in Mexico could violate the Markets and Securities Law and constitute a financial crime,” the statement read.

Thus, Mexican authorities reiterated certain issues on the warning issued in 2014 about the inherent risks in the use of virtual assets as a means of exchange, deposit of value or as another form of investment.

These assets are mechanisms for storing and exchanging electronic information, without the backing of the financial authorities.

“Given their nature, virtual currencies have shown high volatility, as they are the subject of broad speculative activity,” the statement read, adding that the risks for those who use or invest in these assets lack of a special legal regime for dispute resolution.

Thus authorities urged only experienced investors to dabble in cryptocurrencies and to remain vigilant for signs of fraud and investments should be set in the legal framework applicable to the way in which assets are orchestrated, as well as the rights they offer to their acquirers.

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