Financial Regulatory Commission warns against unregulated trading instruments
The Financial Regulatory Commission has issued a caution against bonus points issued by some companies
“Such instruments (including coins and cryptocurrencies) and the public dissemination of related information (such as guarantees in the form of company assets and shares) may cause misunderstanding. More particularly, bonus points (in the form of coins and cryptocurrencies) within a trading system like a digital exchange or bank, and their increasing demand (by distributing information about their likely increased value in the future) may be a source of increased risk for people” states in the caution.
“The above-mentioned digital exchange and digital banks are likely to be unregulated entities; not under the government’s supervision and regulation. Within the scope of licenses issued by the Bank of Mongolia and the Financial Regulatory Commission of Mongolia, 12 banks and three exchanges (Mongolian Stock Exchange, Mongol Securities Exchange, and Mongolian Agricultural Commodity Exchange) operate licensed and related businesses.”
“Some digital products - like security tokens traded by digital exchanges - cannot be exchanged for real securities. Activities related to companies’ shares, securities based on companies’ shares, and securities that can be converted to companies’ shares, are all regulated by the Law on Company and Law on Securities Market. It is stated in these laws that securities shall be registered by the related government authorities.”
Accordingly, the FRC officially warns that tokens, cryptocurrencies, and coins are unpredictable, unsecured and their price volatility is high. “People who invest in such assets should be aware of, and responsible for, the risks and losses that may be incurred.”