Sir Lankan Government Warns Against Scam Initial Coin Offerings

The government of Sri Lanka has cautioned its citizens to beware of fraudsters posing as government officials to stage Initial Coin Offerings (ICO), mining operations or virtual currency brokerage. They said such activities “have no regulatory oversight or safeguards relating to their usage in Sri Lanka.”

The government gave this stern warning via its Central Bank (CBSL) in a press release on July 12, 2022, following the recent developments in the international and domestic markets and the inquiries related to virtual currency. 

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

Although the apex bank had in 2018 and 2021 announced that no entity or company had secured a license or authorization to operate schemes involving VCs, like cryptocurrency exchange and mining services. The report also reiterated that using debit or credit cards for payments related to virtual currency transactions is illegal in line with established laws in the Foreign Exchange Act, No. 12 of 2017.

In their words:

The public is therefore warned of the possible exposure to significant financial, operational, legal and security-related risks and customer protection concerns posed to the users by investments in VCs. The public is also warned not to fall prey to various types of VC schemes offered through the Internet as well as other forms of media.

The Democratic Republic of Sri Lanka lately fell into chaos with the citizens taking over the country’s president’s villa during a protest. This pushed Justin Sun, the founder of the Tron Blockchain, to say 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 largely took the proposition from Sun as a joke.