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Posted: Wednesday 23 November, 2022 at 9:10 AM

Residents urged to exercise caution with Cryptocurrency

By: Staff Reporter,

    BASSETERRE, St. Kitts - THE Eastern Caribbean Central Bank (ECCB) is urging residents in the sub-region to “exercise due diligence” when seeking to invest in crypto-assets in light of the challenges encountered with the collapse of FTX in the Bahamas.


    The crypto-assets company filed for bankruptcy after losing billions of dollars, leaving many whom it served with no surety surrounding their investments with the company at this stage, even as the United States and Bahamian authorities have begun their investigation.


    In a statement, the ECCB said it is “aware of the recent collapse of FTX (registered as FTX Digital Markets Ltd.) headquartered in The Bahamas, which was reported to be a significant player in the crypto space”.


    The Central Bank reported that the Securities Commission of The Bahamas has since suspended the registration of FTX and appointed provisional liquidators for FTX Digital Markets Ltd.  


    “Regulatory action by the Securities Commission of The Bahamas is ongoing. This has not been the first significant fallout in the crypto space this year.”


    Investments in Cryptocurrency or digital assets have increased in recent times with many seeing high returns on their investment in a short window, but the market is volatile with peaks and bust at times. 


    In light of these unfortunate events, the ECCB is encouraging the public to exercise due diligence and to be mindful of the high level of risk crypto-assets present.


    At home in St. Kitts and Nevis, people continue to gravitate towards investing in Crypto-currency which is likely going to be the way forward in years to come as digital currency and tokens increase in popularity, but it comes with risks.


    Dr. Daniel Joseph, Blockchain Researcher and Data Scientist at the ECCB, recently spoke to some of the issues and risks involved.


    He explained that Cryptocurrency “is that it’s built on a decentralised system, meaning that there is no one person in charge”, noting that the level of it being good or bad is dependent on “what’s important to you”. 


    The researcher underscored the volatile nature of the Cryptocurrency: 


    “Importantly, the value of the Cryptocurrencies tends to be quite volatile…Sometimes it goes up by 50 [percent], sometimes it drops by 90. It’s quite volatile. So, it’s a very risky investment.”


    But like every decision being made, it is up to the individual to make the choice based on the data that is available before them.  


    Several countries have either started to accept Bitcoin as an official payment option for government services and some have indicated their desire to accept them going forward, while others have begun the push to accept Cryptocurrency in general as official payment options.


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