The 2021 Crypto bull has been taken as an apt time to warn the public cryptocurrency investment risk by Sri Lanka’s Central bank.
Investment in initial coin offerings, Cryptocurrency mining, trading through crypto exchanges were the three types of crypto activities flagged by Sri Lanka Central bank on the Friday published public notice. Also, because there are no regulatory safeguards in place for crypto activities in Sri Lanka, the three aforementioned activities places the investors in a significant risks.
Areas of concern have been mapped out by Sri Lanka central bank for retail investors in crypto currencies.
In case of issues or disputes related to crypto investment, there are lack of any specific legal or regulatory recourse for investors, also a broad the high volatility value of cryptocurrencies have pushed the banks to warn traders on the risk of exposing of finance to a large potential financial looses. The aforementioned are areas of concern mapped by the Central bank of Sri Lanka.
.The CBSL asserts that there is a high likelihood of cryptocurrencies being associated with criminal activities, including terrorism financing and money laundering. Sri Lanka has, in recent years, been recognized by the Financial Action Task Force for its efforts to crack down on money laundering risks and secured its delisting from a so-called “grey list” of problematic jurisdictions.