December 13, 2017 / 5:32 PM / 8 months ago

Mexican authorities warn cryptocurrency offerings could be a crime

MEXICO CITY (Reuters) - Mexico’s finance ministry and central bank warned on Wednesday that cryptocurrencies were risky investments and said fundraising programs known as initial coin offerings (ICOs) could potentially violate Mexican financial law.

FILE PHOTO - A man touches a screen of a bitcoin ATM in Vilnius, Lithuania December 6, 2017. REUTERS/Ints Kalnins

Amid the growing popularity of cryptocurrencies such as bitcoin, the authorities together with banking and securities regulator CNBV said in a statement such currencies are not officially recognized in Mexico as a legal form of payment.

To date there have been no initial coin offerings originating in Mexico, the statement said.

“However, depending on their specific characteristics, some ICOs that originate and are emitted in Mexico could violate the Markets and Securities Law and constitute a financial crime,” it said.

The authorities urged only seasoned investors to dabble in cryptocurrencies and to remain vigilant for signs of fraud.

“Given their nature, virtual currencies have shown high volatility, as they are the subject of broad speculative activity,” the statement said.

As bitcoin, the best-known cryptocurrency, soared to all-time highs this week, trading services suffered outages, raising questions about the reliability of the nascent platforms.

Coinbase, which provides a popular digital currency wallet, went down under heavy traffic on Tuesday, and bitcoin exchange Bitfinex was also forced to shut down its website after a wave of junk online requests.

Reporting by Julia Love and Anthony Esposito; Editing by Chizu Nomiyama and Jeffrey Benkoe

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