Mexican authorities warn cryptocurrency offerings could be a crime

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Mexico’s finance ministry and central bank warned on Wednesday that cryptocurrencies were risky investments and said fundraising programs known as initial coin offerings (ICOs) could potentially violate Mexican financial law.

Amid the growing popularity of cryptocurrencies such as bitcoin, the authorities together with banking and securities regulator CNBV said in a statement such currencies are not officially recognized in Mexico as a legal form of payment.

To date there have been no initial coin offerings originating in Mexico, the statement said.

“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,” it said.

The authorities urged only seasoned investors to dabble in cryptocurrencies and to remain vigilant for signs of fraud.

“Given their nature, virtual currencies have shown high volatility, as they are the subject of broad speculative activity,” the statement said.

South Korea this week also has tried to curb a speculative bubble in cryptocurrencies, asking traders to confirm their identity via traditional financial institutions, and prohibiting minors and foreign nationals from setting up an account. The nation is mulling cryptocurrency tax as an industry association on Friday vowed to step up transparency.

Source(s): Reuters