The Cyprus Securities and Exchange Commission (CySEC) issued on Thursday a notice, in which it warned cryptocurrency XECOIN is not considered as a financial instrument and does not fall under its supervision. The regulator noted XECOIN has become available in Cyprus and warned investors to be wary.
There are great risks associated with trading in cryptocurrencies as the current regulations do not protect investors in such instruments.
“XECOIN or cryptocoin is not a financial instrument. Therefore, it does not fall within the scope of the Investment Services and Activities and Regulated Markets Laws of 2007 to 2016, nor is supervised by CySEC,” the Cypriot regulator said in the notice.
XECOIN is a hybrid digital currency. It is underwritten with electricity developed using American Lithium Nanotechnology, which makes it one of the first coins underwritten by a commodity.
When engaging with unauthorized and non-regulated brokers and trading instruments, traders are putting their investments at higher risk.
The CySEC licenses, supervises, and regulates players on the local capital market, including forex and binary option brokers. Cyprus is among the main regulation destinations of choice for most brokers that seek to operate in the EU.