With many people afraid of missing out on the chance to make easy money, Poland’s authorities are launching a campaign to educate its citizens on the potential risks involved when it comes to cryptocurrency and margin trading.
The country’s financial regulatory body, the Polish Financial Supervision Authority (KNF) is behind the campaign, which warns of the investment risks using advertisements on the country’s radio and television stations, and in print and digital media.
There’s no preview of these adverts, but the campaign is scheduled to go on air in June. The KNF has already allocated 1.75 million zloty ($474,886) for ads on radio and television and 615,000 zloty ($166,888) for the internet and social media ads.
The increase in media coverage and hype around ICOs and cryptocurrencies has aroused public interest. However, the public might use these as speculative tools without full understanding of their nature and potential risks, according to a translated extract.
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Lack of proper regulations
“The aim of the campaign is to make sure that people who want to invest their money do not trust those who offer easy, safe and high profits. It is highly probable that such schemes may have the character of a financial pyramid, i.e., a situation in which the profit of a given person depends on payments made by persons below the structure,” explains Jacek Barszczewski, spokesman of the Polish regulator.
The campaign also notes the lack of proper regulations in place which means that crypto assets are somewhat murky for investors to be kept safe, unlike strictly regulated traditional financial markets.
Earlier this month, Poland’s finance ministry published an update of the country’s tax code, stating that it will not tax income from transactions on cryptocurrencies. The MoF justified its taxing decision by stating that it considers conducting an in-depth analysis to better regulate the emerging industry.
The KNF also plans ICOs warning to be accompanied by a wider crackdown on unregulated margin trading. It says the fraud in such fields, which includes, among others, leveraged forex trading, is being committed by brokers that encourage investors to make seemingly simple bets on whether shares, currencies or other financial instruments will rise or fall in value.
Earlier in April, the Polish police carried out a raid on the Warsaw offices of Amplio Investments, a company that operates call centers for several forex brands, including CFD 1000, VORTEX ASSETS, and MIB 700. Authorities have arrested 20 of the company’s top managers and salespeople.