Sir Lankan Government Warns Against Scam Initial Coin Offerings

The Sri Lankan government has warned its citizens to be wary of fraudsters who claim government officials to carry out Initial Coin Offering (ICO), mining operations or virtual currency brokers. He said that the activity “has no regulatory oversight or protection related to its use in Sri Lanka.”

The government issued this stern warning through the Central Bank (CBSL) in a press release on July 12, 2022, following recent developments in international and domestic markets and questions related to virtual currencies.

CBSL said, “virtual currencies (VCs) are unregulated digital representations of the value issued by a private entity and can be traded electronically.”

Although the top banks in 2018 and 2021 announced that no entity or company had obtained a license or authority to operate schemes involving VCs, such as cryptocurrency exchanges and mining services. The report also states that the use of debit or credit cards for payments related to virtual currency transactions is illegal in accordance with the laws laid down in the Foreign Exchange Act, No. 12 of 2017.

In a word:

The public is therefore warned of the potential exposure to significant financial, operational, legal and security risks and customer protection concerns posed to users by investing in VCs. The public is also warned not to fall victim to the various types of VC schemes offered over the Internet as well as other media.

The Democratic Republic of Sri Lanka has recently been in turmoil with residents taking over the country’s presidential villa during protests. This prompted Justin Sun, founder of Tron Blockchain, to say that he has “some great ideas on how to get Sri Lanka out of bankruptcy and into prosperity with Web3 as a solution.”

The Twitter community generally takes the proposition from the Sun as a joke.