Saudi Arabia Capital Market Authority (CMA) is the latest to join its global counterparts to issue a warning on cryptocurrencies.

The regulator has issued the warning in the wake of growing promotional activities related to digital currency investments and the emergence of websites and social media advertisements that promote these currencies, targeting Saudi citizens.

“The Capital Market Authority (CMA) affirmed that investment, speculation and participation in the digital currency initial offers involve high risk, including risk of capital loss and fraud, as well as market risks associated with high volatility in digital currency prices, and uncertainty about its valuation, in addition to the difficulty of protecting investors as it being out of the Kingdom of Saudi Arabia's scope of control,” the regulator said.

According to the CMA, the risk of high price volatility and the risk of fraud are the most important risks to consider regarding digital currency investments. It explained that as the digital currency entities are not subject to any supervisory and surveillance authority, investors faces risk of fraud.

“Many of those websites claim that they are licensed bodies for investments and speculation in digital currencies. They tend to sign fake contracts and request to transfer funds to unknown parties. This act also involves operational risks resulting from the possibility of electronic and cyber penetration,” it said.

The CMA urged investors to fully understand the risks of getting involved in digital currency-related investments, particularly as limited information is available to investors about such investments and the lack of supervision and control of the CMA.