Logo of Phnom Penh Post newspaper Phnom Penh Post - NBC warns against fraudulent digital coin schemes

NBC warns against fraudulent digital coin schemes

Content image - Phnom Penh Post
Chea Serey, director of the National Bank of Cambodia, photographed in Phnom Penh. Vireak Mai

NBC warns against fraudulent digital coin schemes

A representative from the central bank warned yesterday of increased fraudulent activities linked to local firms promoting cryptocurrencies, claiming that because Cambodia lacks regulations surrounding their use, they remain a risky investment tool.

Speaking at the fourth annual macroeconomic conference on technology’s role in promoting financial inclusion, Chea Serey, director general of National Bank of Cambodia (NBC), alerted the audience to the risks surrounding the unregulated digital assets.

According to Serey, while there are no central bank policies that allow firms to promote cyrptocurrencies, the NBC has recently been made aware that firms have been conducting workshops to raise funds through what is called an Initial Coin Offering (ICO). ICOs are an unregulated means by which funds are raised for a new cryptocurrency venture.

“On behalf of the central bank, I need to warn you all that there are no cryptocurrencies that have ever been recognised by the bank because they are a very risky financial tool,” she said. “So please, you should all be cautious if you are lobbied to accept the coins as a form of payment instead of regulated cash currency. This is a new form of fraud.”

Serey said that the NBC has alerted Cambodian financial institutions and warned them against accepting any cryptocurrencies. Officials are keeping a close eye on the matter, she claimed, and are also trying to educate the public about ICO fraud schemes.

The NBC issued a warning against use of cryptocurrencies, such as bitcoin, as early as 2014, cautioning consumers that if they were to purchase digital assets, they would not be legally protected by Cambodian financial regulations.

Rithy Ray, an independent IT and payment consultant, said yesterday that cryptocurrencies were introduced in Cambodia several years ago, but they have taken time to gain traction. With the Kingdom moving into a more digitised economy, however, he said that more people have warmed to the idea of virtual coins.

According to Ray, although cryptocurrencies are legal forms of tender in most developed markets, Cambodia does not yet have the infrastructure to support them. He added that any firm lobbying for investment support into developing cryptocurrencies are likely participating in fraudulent operations akin to Ponzi schemes.

“In Cambodia, there are firms that claim that they are trying to create new cryptocurrencies and are able to convince people to invest, but they do not tell people if the coins even have a value,” he said. “We must understand that if the coins cannot be used for payment, we should not buy it. It is total fraud.”

MOST VIEWED

  • Phnom Penh unveils rules for post-lockdown transition

    The Phnom Penh Municipal Administration issued a set of detailed guidelines for the seven days to May 12 after the capital emerges from lockdown at the onset of May 6. In the 14-page document signed by municipal governor Khuong Sreng released on the evening of May 5, the

  • SBI LY HOUR Bank Launches Cross Border Money Transfer Service between Cambodia and Vietnam on RippleNet, utilizing DLT

    SBI LY HOUR Bank Plc and Hanoi-based Tien Phong Commercial Joint Stock Bank (TPBank) on Friday launched the first Cambodia-Vietnam money transfer service in real currency via RippleNet, provided by SBI Ripple Asia Co Ltd to provide safe, fast and convenient services. SBI LY HOUR

  • Gov’t issues guidelines as lockdown nears end

    The government has issued a five-page set of instructions to be enforced when the three-week lockdown of Phnom Penh and adjacent Takmao town in Kandal province ends on May 6. According to an announcement signed by Prime Minister Hun Sen on May 4, the instructions cover a

  • Cambodia ready to exit LDC status

    Cambodia is well-prepared to minimise economic risks when it graduates from its Least Developed Countries status, according to a senior official at the Ministry of Commerce on May 7. Four LDCs – Cambodia, Laos, Bangladesh and Nepal – met at a virtual workshop last week to explore potential

  • Nine US franchises eye Cambodia debut

    Nine famous US franchising companies are looking for business opportunities and expansion into Cambodia to build a footstep for a strong foundation in Southeast Asia. The US embassy in Phnom Penh, in partnership with the US Foreign Commercial Service and with support from the American

  • Lost in translation: ‘Starvation’ in capital’s designated red zones

    “DACH bay” is a Khmer slang meaning a “loss of income”, that could also be literally translated to «deprived of rice”, which alludes to starvation. However, civil society organisation (CSO) officials have independently confirmed the government’s prior assertions that there are no cases of