Oman Financial Services Authority (FSA), which regulates the investment and financial market in the country has issued a warning to citizens against dealing with unlicensed digital asset exchanges or platforms whether on the internet or on social media.
The warning also extends to unlicensed platforms offering commodity investments such as gold, crude oil and even crowdfunding platforms that are promoting shares of companies.
The Oman FSA stated that these platforms involve significant risks and lead to loss of money.
Majid Ahmed Al Abri, the FSA’s spokesman, noted that these digital asset, crowd funding and commodity selling platforms lure users with their marketing strategies that promise quick returns on investments or financial rewards to newbie investors, or faking success stories to attract new investors.
He added that public awareness is key to preventing falling into the trap of these platforms.
The regulator further pointed out that unlicensed platforms do not provide legal protection for investors making their money exposed to risks. These platforms also could be involved in money laundering activities which threaten the financial stability of Oman.
Al Abri said, “We call on all to be fully aware and verify the credibility of the platforms before taking any investment move. The FSA recommends that those wishing to invest through activities related to securities via electronic platforms or companies to ensure that they are licensed and registered on the FSA’s website (www.fsa.gov.om) and the smartphone application, which enables them to view the list of companies and entities licensed to practice these activities.”
FSA Oman cancels crowdfunding licensed companies
Following the warning, Oman FSA canceled the licenses of two entities in the fields of securities and crowdfunding. The entities Sharek Investment and New Sphere are no longer licensed and have been de-registered.
The administrative penalties were made because the companies failed to carry out the activity since their establishment pursuant to Article 123/a of the Executive Regulation of the Capital Market Law issued vide decision No. 1/2009 as part of the review of the licenses granted to a number of companies operating in the field of securities to practice the business of crowdfunding during 2022 , which was the first year of the crowdfunding market in the Sultanate of Oman after the issuance of the regulation for crowdfunding by decision No. 153/2021.
Oman still does not have a crypto regulatory framework
Since July 2020, the Oman government’s stance remains the same. The use of cryptocurrency is legal but unregulated. Holding and trading cryptocurrency is neither guaranteed by Oman’s Central Bank nor protected by Banking Law No. 114/2000.
In 2023, the Central Bank had announced it would be issuing crypto regulatory framework, but nothing has come out of it since. At the time it was noted that the aim of the regulation would be to establish a framework that would prevent market abuse in the virtual and digital asset ecosystem, and offer licenses to VASP providers.
Oman seems to have fallen behind other countries in GCC such as Bahrain, UAE, and even Qatar which have come out either with crypto regulatory frameworks or digital asset tokenization frameworks.
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