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The Latvian Financial and Capital Market Commission has identified suspicious transactions and fraud attempts in the domestic cryptocurrency space.
In an official notice released on Monday, the FCMC urged investors to “be especially vigilant, as cryptocurrencies operate in an infrastructure that is currently characterized by less regulation than the financial and capital markets.”
Within Latvia, the issuance and circulation of cryptocurrencies are mostly unregulated, with exceptions for some types of investment services and contracts involving cryptocurrencies that require a license from the FCMC.
The regulator shared several details about the “signs of fraud” he identified in the domestic cryptocurrency market. Online cryptocurrency ads spread by scammers may use “names and images of known individuals or licensed companies,” the FCMC noted. These ads often direct investors to smart websites where they are asked to provide their phone number. Many of the attempts to persuade investors to “invest” in fraudulent schemes come through a phone call, the regulator said.
Scammers can also mimic authorized market participants, stealing the registration numbers or contact details of legitimate companies to mislead investors.
“Fictitious companies can offer you investments in bonds, stocks, forex products and cryptocurrencies that are not traded on the stock exchange, are worthless, exaggerated or even non-existent,” FCMC wrote. In particular, the regulator stressed that, in the absence of regulatory supervision, investors are not protected in the event of negligence.
Rather than being drawn into seemingly affordable online investment opportunities, the FCMC suggested:
“For non-financial services professionals wishing to invest, it is recommended that they go to a bank or investment brokerage firm that has been licensed or licensed. Such service providers are obliged to inform about possible risks and provide a corresponding offer to that of the customer’s risk profile. “
