THE Malaysian public have been advised to practise extra care and due diligence when investing in cryptocurrency investments.

Paul Grimm, a prominent United States district judge, said it was imperative that people know such currencies are not backed by the “full faith and credit” of the government.

He said members of the public should carefully evaluate the risks associated with dealings in digital currencies.

“If you are looking at cryptocurrency as an investment, you should do your due diligence over how the currency is valued, the value’s fluctuations, and how to deal with risks associated with the investment,” he said.

Grimm was commenting on the fears of many Malaysians, who are still sceptical about investing in digital currencies as they are not legal tender nor regulated by Bank Negara.

The central bank has pointed out that digital currency businesses are not covered by prudent market conduct standards or arrangements applicable to financial institutions which it regulates.

Grimm said people should understand how the value of cryptocurrencies fluctuate and where an investor should buy such currencies if their values increase to receive good returns.

“Cryptocurrencies are not backed by the national banking system and no regulator can step in to ‘cool it down’ or ‘heat it up’ with regulatory monitoring policies that will affect them.

“They exist in a market that is subject to fluctuations that are not controlled by a national bank with professionals,” he added.

Grimm was one of the speakers at a forum entitled “Cybersecurity in a Digital Era of Human Security”, organised by the Centre for Media and Information Warfare Studies of Universiti Teknologi Mara in Shah Alam yesterday. – Bernama, October 27, 2018.