The CBSL (Central Bank of Sri Lanka) has warned people against the use of cryptocurrencies in the country, citing the various risks associated with investing and trading in such a volatile and unpredictable industry as reasons for issuing the warning.
As of the time of this writing, the use of crypto in Sri Lanka is not backed by any law, and as such, any trading, mining, or investing done utilizing cryptocurrency is susceptible to punishment and penalties by the appropriate local authorities.
Investing in crypto comes with huge risks, and there are no regulatory bodies to protect you, according to the CBSL
The warning by the CBSL had been published on its official page this past Friday on April 9th. As per the words of the apex bank, the potential investments in digital assets and cryptocurrencies such as Bitcoin, Litecoin, and Ethereum might bring certain benefits to the investors and traders, but these are heavily overshadowed by the various significant risks associated with investing in the industry. The lack of regulatory bodies makes it difficult to help individuals who may have been exploited or taken advantage of in the cryptocurrency space, and thus people stand to lose potentially large amounts of money and investments, and there is next to nothing they can do about it in Sri Lanka as far as local law enforcement is concerned, according to the CBSL.
Furthermore, as no activities related to cryptocurrency have been approved nor authorized to function within the country, investors might also want to be careful that they do not end up on the wrong side of the law by indirectly becoming involved in anything illegal. The CBSL also added that no crypto exchanges had been granted official approval to operate within Sri Lanka, and so buying and selling cryptocurrency through these exchanges may be subject to legal action, as would the process of mining or ICOs (initial coin offerings).
CBSL issues multiple warnings against the use of crypto
The CBSL had issued multiple warnings in addition to the ones we have already mentioned, and these included the warning that cryptocurrency may be used by terrorist organizations to finance their activities as the lack of a governmental or regulatory body can make it much easier for such groups to carry out their plans. Money laundering is also commonplace in the cryptocurrency industry, according to the CBSL.
The final warning that the Sri Lankan Central Bank had issued had been concerning the potential purchasing of cryptocurrencies via exchanges from abroad. This could be in direct violation of the country’s Foreign Exchange Regulations, according to the CBSL.
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