The Central Bank of Sri Lanka urged the public to stop investing in cryptocurrencies

The Central Bank of Sri Lanka reported that it has recently received a large number of complaints from users who have suffered losses from investments in digital assets or who have become victims of cryptocurrency scams. Previously, the regulator has already warned about the financial, operational and legal risks of investing in crypto assets, as well as the risks associated with the security of users and the protection of confidential data. CBSL noted that these risks have already materialized, recalling the collapse of several cryptocurrency companies in the past year.

The Central Bank said that in Sri Lanka, cryptocurrencies are considered unregulated investment vehicles, and the agency does not recognize them as an asset class. Crypto assets are not considered legal tender in Sri Lanka and there are no regulations set for their use. Therefore, in accordance with the Foreign Exchange Law of 2017, debit and credit cards are prohibited from being used to make cryptocurrency transactions, the Central Bank recalled.

Digital assets do not help develop the domestic economy at all, but, on the contrary, contribute to the devaluation of the state currency, the central bank added. He also warned of a growing number of scammers promising high returns on investments in crypto assets. Therefore, local residents are advised not to participate in cryptocurrency schemes advertised on the Internet or in the media.

The agency emphasized that it did not issue any licenses to individuals or legal entities to work with cryptocurrencies, organize an initial coin offering (ICO), mining, as well as to provide any crypto-currency services, whether it be custodial services or advice on investments in digital assets.

In February, the Central Bank of Sri Lanka said that the country’s government would never accept bitcoin, as the introduction of decentralized cryptocurrencies could exacerbate the economic crisis in the country.