(CMR) The Cayman Islands Monetary Authority (CIMA) has issued an advisory against investing in Initial Coin Offerings (ICO) has the local market interest increases.
The warning comes at a time when many in the local community as joining various schemes to attempt to become millionaires off of Bitcoin and other similar digital currency investment plans. There has been significant public interest including several seminars on the matter. One of the key selling points on social media is the ability to make large sums of money almost immediately.
However, many skeptics warn that this is just a long line of get-rich schemes that in the end will not make most persons rich at all. A local investment manager agrees with the CIMA warning and states that:
“There are just too many aspects of this that feels like many more Ponzi Schemes before it. The volatility and unpredictability of the market is a real concern for many. Additionally, most persons do not have the requite knowledge about digital currencies to fully understand what they are investing in and committing to. – I personally will take a wait and see attitude and hope that people do not invest their life savings in this.”
The press release specifically warns about the ICOs and explains how they operate and what red flags to look out for. Investors are encouraged to do “thorough research” before making any decisions. They further warn that
“High reward investment scenarios have high potential for financial loss and fraud.”
The public is also reminded that virtual currency is not legal tender in the Cayman Islands and most countries.
Read the full notice here.