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

  • Kingdom’s domestic milk still cannot compete with imports

    Price competition and a lack of confidence by consumers are the main reasons the dairy market cannot compete with imports, said domestic milk producers. The large displays of imported fresh milk at the Kingdom’s supermarkets present a cumbersome obstacle for local producers, they said.

  • ‘Pesticide-laden cucumbers’ kill two, poison 150 in Banteay Meanchey

    At least two youths have died and 243 others are being treated for vomiting, diarrhoea, breathing difficulties, dizziness and muscle weakness after they ate cucumbers suspected to consist of pesticides. The incident happened on Saturday, said Banteay Meanchey provincial police chief Ath Khem. He told The

  • Three dead, 13 injured in collapse at Siem Reap pagoda

    At least three people were killed and more than 10 others injured on Monday after a dining hall under construction collapsed at Prasat Kokchak pagoda in Kokchak commune, Siem Reap province. Provincial police chief Tith Narong said Military Police, soldiers and local volunteers had successfully recovered 16

  • Forest Harmony’s $18M luxury villas break ground in Kampot

    Local and French joint-venture Forest Harmony has broken ground on its $18 million “second-home” Luxury Holiday Villas project in Kampot province. Century 21 Mekong CEO and local shareholder of the project Chrek Soknim told The Post that the project will comprise 90 villa units covering 18ha on a 97

  • China Unicom enters Cambodia

    China Unicom, the country’s largest telecoms operator, has expanded into Cambodia to build optical telecommunication pathways in the Kingdom as part of the Belt and Road Initiative (BRI). The Hong Kong-listed company officially opened its China Unicom (Cambodia) subsidiary on Monday to become the

  • PP-SHV Expressway on track for completion in early 2023

    The construction of the $1.9 billion Phnom Penh-Sihanoukville Expressway, which broke ground at the end of March, is on track to be completed by early 2023, Ministry of Public Works and Transport spokesman Vasim Sorya said on Monday. The 190km high-speed highway linking the capital to the