Sri Lanka’s Central Bank warns against crypto amidst dire situation

The political and economic situation in Sri Lanka has worsened over the past few months. In view of this, the Central Bank of Sri Lanka (CBSL) has warned people against buying cryptocurrencies. Due to the lack of regulatory system, CBSL has clarified that it has not permitted any firm for crypto related services.

Sri Lankan President Gotabaya Rajapaksa has absconded. In protest, people have started capturing government institutions. In a blog post, CBSE has given information about buying and trading of virtual digital assets to be cautious. It states, “CBSL does not license or permit any firm to conduct schemes relating to cryptocurrencies. Further, initial coin offering, crypto mining or crypto exchanges are not permitted.” The political crisis in Sri Lanka and the deteriorating economic situation, as well as the steep fall in the global crypto market, is also a cause for concern for CBSL.

The total market capitalization of the crypto segment stood at over $2 trillion in March. This has come down to around $91.4 billion. The increase in interest rates by the Federal Reserve of America and the Central Bank of some other countries, slowdown and failure of crypto project Terra is causing sell-off in the crypto market. This has caused huge loss to the investors. The largest cryptocurrency by market capitalization touched a high of around $69,000 in November last year. Its price has come down to a little over $20,000. The prices of many other cryptocurrencies have also come down significantly.

CBSE has advised people not to trust crypto schemes for profit making as it can expose them to huge financial risk. The blog post said, “Investing in cryptocurrencies can expose people to significant financial, legal and security risks. People should not be deceived by the variety of cryptocurrency schemes being offered through the internet and channels. are also warned.”

Cryptocurrency prices in Indian exchanges

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