Slovenia Sours On Cryptocurrencies

The financial watchdog of Slovenia waded into the debate about cryptocurrencies Monday (Oct. 9), issuing a warning that the digital currencies aren’t regulated and are not backed by the central bank or any other government entity in the country.

According to a news report in Reuters, the Financial Stability Board, which works with the central bank in the country, issued the warning amid increased interest from the public, particularly since they view it as an investment opportunity.

“Investors in virtual currencies … have to take into consideration whether risks are in line with their personal preferences and investment goals,” the board said in a statement, reported Reuters. The report noted the Financial Stability Board is led by the Bank of Slovenia Governor Bostjan Jazbec, who also sits on the European Central Bank’s governing council. The job of the board is to implement policy that protects the country’s financial system, noted Reuters. Slovenia also cautioned about initial coin offerings, which aren’t regulated. It said they should only invest an amount in ICOs that wouldn’t leave them too exposed.

The move on the part of Slovenia comes at the same time that Abu Dhabi has issued its own warning about ICOs and cryptocurrencies, such as bitcoin. According to a news report in CNBC citing Abu Dhabi’s Financial Services Regulatory Authority (FSRA), the regulator released guidelines for both ICOs and cryptocurrencies. Under the new guidelines, companies that want to launch an ICO have to first check with the FSRA to see if it will fall under the watchdog’s regulation. The companies will also be required to publish a prospectus similar to companies looking to sell stock via an initial public offering. Any middlemen looking to deal in ICOs need to have the approval of FSRA, noted the report.

There are areas that will remain unregulated, such as when a token is issued as part of the ICO, according to the report. In those cases, FSRA warned that investors should be extremely cautious before investing any money.