Muscat – The Central Bank of Oman (CBO) has once again urged citizens and residents to exercise caution when engaging in transactions involving the use of cryptocurrencies, including crypto-assets, given the significant risk of fraud being uncovered in this decentralized financial space globally .
The warning comes amid a flurry of scams targeting cryptocurrency investors worldwide. Just last week, Binance—the world’s largest cryptocurrency exchange—potentially lost hundreds of millions of dollars after a hack of its network caused the exchange to temporarily suspend transactions.
Earlier, in August, hackers made off with around $200 million in cryptocurrency from Nomad, a tool that allows users to exchange tokens from one blockchain to another. More recently, the US Treasury Department sanctioned Tornado Cash, a cryptocurrency anonymization service after it was reported that hackers were using the service to launder billions in stolen cryptocurrency. Industry losses related to fraudsters and hackers have been around $2 billion so far this year, according to experts.
“Be careful using cryptocurrencies as well as other deceptive investment schemes that warn of huge profits (Ponzi schemes),” Oman’s top bank warned in a recent tweet.
In repeated advisories to the public, the Central Bank of Oman (CBO) has warned that it has not licensed any agency or bank to deal in cryptocurrencies in the Sultanate of Oman. Protection given to investors under Banking Act 112/2012 does not cover digital or virtual currencies, as well as activities involving their use, the banking sector regulator has often advised.
But given the explosive growth of crypto and virtual assets globally, regulators in the Sultanate of Oman are taking steps, albeit with great caution, to support the eventual legalization and regulation of some aspects of decentralized finance-based products and services.
Earlier this year, the Capital Markets Authority (CMA) said it was preparing to appoint a consultancy firm to advise the regulator on the design and implementation of a “Regulatory Framework for Virtual Assets (VAs) and Virtual Assets Service Providers (VASPs)”. The aim, it said, is to support the establishment of a legislative and regulatory framework for the regulation of virtual assets and the licensing, supervision and regulation of service providers.
Last year, the Central Bank of Oman announced that it had set up a high-level working group to study the full range of issues encompassing the financial benefits – as well as the risks – associated with any decision to approve the use of cryptocurrencies in Oman.
Still, some leading government agencies have already taken bold steps to venture into the crypto space. Earlier this year, the Oman Investment Authority (OIA), the integrated sovereign wealth fund of the Sultanate of Oman, took a stake in Crusoe Energy Systems Inc, a US firm that helps energy companies cut flaring by using stranded natural gas to mine cryptocurrency instead .
More recently, Oman Water and Wastewater Services Company (OWWSC) and Digital Digits (Easy Coins) signed Memorandums of Understanding with Connected Chains to trial the use of cryptocurrency for payments. As part of the pilot, a cryptocurrency pegged to the value of the Omani rial will be used for payment of dues by customers at selected customer service centers of OWWSC, as well as online using EasyCoins’ Hasalah Digital Wallet.
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