CMA caution Kenyans against investing on crypto-asset markets

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Paul Muthaura, CEO Capital Markets Authority
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In a deliberate effort to protect investors against emerging crypto-asset markets, the Capital Markets Authority (CMA) has cautioned the public against participating in any initial coin offering or trading in any coin exchange offered by Wiseman Talent Ventures.

In a cautionary presser, Paul Muthaura, the Authority’s CEO averred: “The nature and features of the capital raising and coins trading promoted by Wiseman Talent Ventures is taking the form of regulated activities which have not yet been approved by the authority,” adding that the authority was currently investigating the operations of the organization providing a platform for trading of the said coins on its exchange christened www.kenicoinexchange.com.

“The nature and features of the capital raising and coins trading promoted by Wiseman Talent Ventures is taking the form of regulated activities which have not yet been approved by the authority.”

Paul Muthaura, CEO, Capital Markets Authority

Noting that global trends in unregulated digital currencies demonstrates that the crypto-asset market is uncertain and has experienced accelerated boom and bust cycles, Muthaura was categorical that such platforms may expose investors to substantial losses.

Making reference to Wiseman Talent Ventures, the Authority stated that it had noted discrepancies in the information provided in the website and the information provide to CMA during interviews of Wisemen Talent Ventures leadership in relation to the total number of Kenicoin sold and the total funds raised.

The firm also promised guaranteed returns of 10 per cent monthly on the initial investment in coins which were issued at Sh100 at the Initial Coin Offering (ICO) and are now purportedly being marketed as trading at Sh2,000 at its Coin Exchange.

CMA asserted that Kencoin’s value being marketed as exponentially rising since its initial offering poses substantive information asymmetry, liquidity and fraud risks an assertion that has been opposed by Wiseman Talent Ventures proponents noting that whichever way it is viewed from, digital currencies is the future of transactions.

In February, the regulator issued a notice warning investors against taking part in ICOs, saying it had not approved any offerings. It said all ongoing offerings were unregulated and speculative investments with considerable risk exposure to investors.

Last year, the Central Bank of Kenya equally took a similar position, advising the public against Bitcoin, one of the most popular digital currencies. During a CIO Fintech Summit, the Central Bank Governor stressed: “There is no currency in crypto-currency.

“It is only the regulators who are not as fast-paced as the digital coins plus the threat of cyber-crime. In the meantime, when the regulations are not there and open to all manner of fraud, the risks are astronomical. Such crypto currency companies cannot have a concrete value, but in the near future when there is a regulation to contain digital currencies, the value of such companies will skyrocket,” said alluded the Wiseman Ventures Talent who sought anonymity.

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