The Dubai Financial Services Authority has stated that it does not regulate online product offerings that involve the issuance of virtual coins or tokens in return for payment of a subscription price.

Such coins or tokens are often referred to as cryptocurrencies and are increasingly being made available to the public by way of initial fundraising events referred to as Initial Coin Offerings, Initial Token Offerings, or ‘Token Sales.’

The tokens or coins involved in these product offerings are structured in different ways and linked to different business propositions. For example, some are seeking to develop a new digital platform or provide access to an online platform; others offer an opportunity to invest in properties, businesses and assets, with promises of certain benefits or monetary returns; others are backed by particular types of assets.

Although it is not yet concerned about the way such product offerings work in detail, the DFSA is warning investors that they, and the systems and technology that support them, are complex. Its recent paper on the subject argues: "They have their own unique risks, which may not be easy to identify or understand; such risks may increase where offerings are made on a cross-border basis. These offerings should be regarded as high-risk investments. Before engaging with any persons promoting such offerings in the DIFC, or making any financial contribution toward such offerings, the DFSA urges potential investors to exercise caution and undertake due diligence to understand the risks involved. The DFSA has...issued warnings and guidance about the common types of scams perpetrated on consumers."

There has been a flurry of other such regulatory warnings about ICOs and ITOs around the world in the last month.