Public warned to ‘tip-toe’ carefully on cryptocurrencies

People should be cautious on this new investment wave, says Fomca sec-gen


As Malaysia awaits Bank Negara Malaysia’s (BNM) guidelines on cryptocurrencies, consumer associations are warning the public to be wary of digital investment schemes until the sector is regulated.

As there has been a growing interest by Malaysians of cryptocurrencies such as bitcoin, the associations believe it is better for people to refrain from investing to avoid being scammed.

“The bitcoin schemes offered are unsafe as BNM is yet to come with the regulation process,” Federation of Malaysian Consumers Association (Fomca) secretary general Datuk Paul Selvaraj said.

Selvaraj said the people should not be too quick to ride on this new investment wave as it is unsafe and the future of the investment is uncertain.

BNM will issue a guideline on bitcoin by year-end, not discounting a possible ban of cryptocurrencies altogether.

Bitcoin is the most popular form of cryptocurrency, while ethereum is an open software platform based on blockchain that enables developers to build and deploy decentralised applications.

The growing concern of bitcoin comes as the police has

uncovered a sum of RM4.4 billion in losses involving 24 investment schemes between July 2013 and September this year.

These investments include two bitcoin businesses known as “Bit Kingdom” and “Al Mubin Agarwood”.

For Bit Kingdom alone, the police noted losses amounting to some RM560 million were recorded involving up to 500,000 victims.

Consumers’ Association of Subang and Shah Alam president Datuk Dr Jacob George said the cryptocurrency investments should be checked thoroughly by all stakeholders before making any decision about it.

“As not everybody understands the cryptocurrency processes, the policymakers and stakeholders should go through deep consultations and audits, thus they will require more time to decide on this matter,” he said.

Both Selvaraj and George urge the public to not be easily duped into investing in schemes that promise high returns within a short span of time.

Malaysian Muslim Consumers’ Association lead activist Datuk Nadzim Johan said any payment method and currency must be regulated by the government.

“It is worrying because the system is very loose and beyond control, which could contribute to illegal transaction activities that will harm both consumers and the government,” he said.