Egypt’s Financial Regulatory Authority (FRA) on Tuesday renewed its warning to all citizens against engaging with calls from individuals and entities, particularly via online platforms, to invest in financial products or deposit funds for investment purposes that violate Egyptian law. The authority emphasized that dealing with unlicensed entities exposes investors to significant risks and subjects the providers of such services to legal accountability.
As part of its oversight of non-banking financial markets, the FRA stated it has observed an increase in online platforms and advertisements soliciting investments and offering financing without proper licensing. This includes entities promoting investments with promised returns without FRA approval or an accredited prospectus, which violates Capital Market Law No. 95 of 1992 and Law No. 146 of 1988 concerning companies receiving funds for investment.
The FRA specifically cautioned against engaging with solicitations for virtual cryptocurrencies, highlighting extreme risks, their association with financial crimes, lack of material backing, and severe legal penalties under Egyptian law for unlicensed trading or promotion, including imprisonment and fines ranging from EGP 1m to EGP 10m. Similarly, the authority urged citizens to avoid unlicensed gold investment schemes, clarifying that legitimate gold investment is regulated exclusively through FRA-licensed investment fund units, with three such funds currently approved, rather than direct deals with unauthorized traders.
To protect investors, the FRA is updating its website with a list of licensed non-bank financial entities and developing a “negative list” of unauthorized operators identified through reports and verification. The FRA is pursuing legal action against these illicit platforms and encourages citizens to report suspicious solicitations via email with supporting evidence.
The FRA emphasized that these awareness efforts aim to enhance financial literacy, protect investor rights, and maintain market stability. Companies planning public share offerings or seeking to receive funds for investment are advised to consult the FRA regarding legal and regulatory requirements beforehand.
