Lithuanian banking association warns against cryptocurrencies risks

VILNIUS, Feb. 27 (Xinhua) -- The Association of Lithuanian Banks (LBA) warned on Tuesday about risks associated with investing into cryptocurrencies following survey showing half of Lithuanians lack knowledge of cryptocurrencies.

According to LBA, in spite of growing popularity of cryptocurrencies, "the awareness of this trend is still rather vague".

"Those who've decided to invest into cryptocurrencies should understand that they're doing this at their own risk, cryptocurrencies are ungoverned and unregulated," Mantas Zalatorius, the president of LBA, said in a statement.

Zalatorius also notes that cryptocurrencies are connected to money laundering and crime funding.

"Europol reports that billions of euros of criminal funds are being laundered using cryptocurrencies. No one knows what is the prospects for cryptocurrencies," said the president of LBA.

His comments followed a survey published on Tuesday assessing Lithuanian's knowledge of cryptocurrencies.

According to the survey conducted by Spinter tyrimai, 36 percent of Lithuanians do not have full knowledge of what cryptocurrencies, while 15 percent note they know nothing about cryptocurrencies.

The remaining 49 percent in the survey have an opinion of the cryptocurrencies. Some 27 percent think cryptocurrencies is a bubble, while 22 percent argue this is a promising investment, shows the survey.

Zalatorius said those buying cryptocurrencies risk losing all capital invested and sometimes "reputation".

"Currently, the value of cryptocurrencies is based on expectations, while transactions in cryptocurrencies are irrevocable and anonymous," said Zalatorius.

Comments from LBA echo the position of Lithuania's central bank announced last year. In October, Bank of Lithuania warned the country's financial institutions that they "should not participate in activities or provide services associated with virtual currencies".

"Virtual currency is an instrument involving high risk, while profiteering on it may lead to significant losses of funds," warned Marius Jurgilas, the member of the board of the Bank of Lithuania, in a statement.

"An illusion that virtual currencies are supervised or safe can in no way be created," said Jurgilas.

Meanwhile, popularity of raising money through the sale of cryptocurrencies, or initial coin offerings (ICO), has been growing among Lithuanian businesses.

Lithuanian companies have raised more than 200 million euros through the sale of their cryptocurrencies, according to analysis by the Lithuanian business news website vz.lt. Enditem