Regulators in the Caribbean warn consumers on risks of cryptocurrencies

Chris Lee
background of trinidad and tobago with a bitcoin

A group of major institutions in a Caribbean country have warned against the risks posed by crypto fraud.

A joint statement from several leading financial institutions in Trinidad and Tobago described cryptocurrencies as “volatile” and warned that this “may make them unsuitable for most investors”.

The statement, which was described as a “Joint Public Advisory”, came from a number of organisations. This included the Trinidad and Tobago Securities and Exchange Commission as well as the country’s Financial Intelligence Unit.

The Central Bank of Trinidad and Tobago was also part of the group.

The substance of the statement began by pointing out that there were currently no laws in place in Trinidad and Tobago covering the use of cryptocurrencies.

“Providers of virtual currencies are neither regulated nor supervised by the Authorities at present and there are currently not legislative provisions under the Authorities’ purview that provide protection to consumers for losses arising from the use of virtual currencies”, they wrote.

“In addition, unregulated virtual currency companies may lack appropriate internal controls and may be more susceptible to fraud and theft than regulated financial institutions.

The statement also pointed out that the value of a crypto token can rise and fall.

“Virtual currencies tend to be volatile and their value can fluctuate significantly”, it said.

“The high volatility of virtual currencies may make them unsuitable for most investors, especially those investing for long-term goals or retirement.”

Trinidad and Tobago is a country of 1,369,000 people.

Like several other Caribbean countries, it has developed a reputation as pro-investment – and as such has a number of investor-friendly features, such as capital markets.

However, in this most recent statement, the authorities appeared keen to emphasise their view that cryptocurrencies stood apart and distinct from other forms of investment.

While there was no suggestion that the organisations which produced the statement would look to lobby for regulation, they did promise to remain vigilant against particular threats.

“Further, the Authorities note with concern the emergence of schemes purporting to be virtual currencies that promise high returns when members purchase tokens and recruit others to join/invest”, it said.

“We advise members of the public to be cautious of such schemes and conduct appropriate due diligence as these may be Ponzi schemes in disguise.

“The Authorities shall continue to monitor activities involving the use of virtual currencies and advise the public accordingly”, it added.

The country has grappled with issues around crypto fraud previously, which may have influenced the decision of these authorities to come out with their recent warning.

Last year, the country’s Finance Ministry was forced to issue a statement confirming it had nothing to do with an exchange and initial coin offering, or ICO, which was taking place in the nation.

The Securities and Exchange Commission had to confirm that it had not approved the scheme, known as BarterCoin.

In a sign of the public mood, a comment piece published in the Trinidad and Tobago Guardian in the same year asked whether “unscrupulous individuals” can “manipulate crypto prices”.

Chris Lee

Latest news

Forex vs Crypto: What’s Better For Beginner Traders?
The crypto and forex markets are two of the world’s most popular among investors and traders. Read more
Three Great Technical Analysis Tools for Forex Trading
You don’t have to be very technical minded to make use of technical analysis in your forex trading. Read more

Safest Forex Brokers 2024

Broker Info Best In Customer Satisfaction Score
#1 73% of retail CFD accounts lose money. Founded: 2014 Global Forex & CFD Broker
Number One Broker
Best Trading Conditions Visit broker
#2 Blackbull LogoYour capital is at risk Founded: 2014 Global Forex Broker
Number One Broker
BEST SPREADS Visit broker
#3 AvaTrade LogoYour capital is at risk Founded: 2006 Globally regulated broker
Number One Broker
#4 * 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money Founded: 2008 Global CFD Provider
Number One Broker
Best Trading App Visit broker
#5 Between 74-89 % of retail investor accounts lose money when trading CFDs Founded: 2010 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
#6 Forex Broker eToro Logo76% of CFD traders lose money Founded: 2007 Global CFD & FX Broker
Number One Broker
#7 XM LogoYour capital is at risk Founded: 2009, 2015 and 2017 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
#8 FxPro LogoYour capital is at risk Founded: 2006 CFD and Cryptocurrency Broker
Number One Broker
CFD and Cryptocurrency Visit broker

    Forex Fraud Certified Brokers

    FXTM Logo
    XM Logo
    FxPro logo
    AvaTrade logo
    BlackBull Logo Small
    eToro Logo
    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.