Latvian regulators warn public about cryptocurrency fraud

Crypto remains under-regulated, so Latvian investors need to be extra vigilant, says the FCMC. 230 Total views.

Latvia's Financial and Capital Market Commission has identified suspect transactions and attempted fraud in the domestic cryptocurrency space.

In an official warning published on Oct. 19, the FCMC urged investors to "Be particularly vigilant, as cryptocurrencies operate in an infrastructure that is currently characterized by lower regulation than in the financial and capital markets."

Within Latvia, the issuance and circulation of cryptocurrencies is mostly unregulated, with exceptions for certain types of investment services and contracts involving crypto that require a license from the FCMC. The regulator has shared several details of the "Signs of fraud" it has identified within the domestic cryptocurrency market.

Online crypto adverts circulated by scammers may use "Names and images of well-known individuals or licensed companies," the FCMC notes.

These ads often direct investors to slick websites, where they are asked to provide their phone number.

Many of the attempts to persuade investors to "Invest" in fraudulent schemes happen over a phone call, the regulator says.

Scammers may also imitate licensed market participants, appropriating legitimate firms' registration numbers or contact details to mislead investors.

"Fictitious companies may offer you investments in bonds, stocks, forex products and cryptocurrencies that are either not traded on exchanges, are worthless, exaggerated, or even non-existent," the FCMC writes.

In particular, the regulator emphasized that, in the absence of regulatory supervision, investors are not protected in the case of malpractice.