Authorities in Macau have issued a warning to residents over a cryptocurrency company, backed by a former gangster, regarding possible ‘fraud and criminal activities.’

A warning was posted on the Monetary Authority of Macau’s website reminding residents that digital currencies are not legal tender on the autonomous region on the south coast of China, reports the South China Morning Post.

According to the report, the warning follows news that Macau Dragon Group, a firm associated with former gangster ‘Broken Tooth’ Wan Kuok-koi, had employed British company, Cambridge Analytica, to promote Dragon Coin, a new cryptocurrency designed to aid gamblers to transfer money to Macau casinos.

Wan is a notorious figure in the crime world who spent over 14 years in prison. Prior to his arrest he was the leader of the Macau branch of the 14K Triad.

In the statement, the authority wrote:

The media has reported that a Macau company was involved in an ICO [initial coin offering] recently. Monetary Authority of Macau reminds all Macau residents that cryptocurrencies are virtual products, but not legal currencies or financial tools. Residents should be aware of fraud and criminal activities associated with cryptocurrencies.

Under Macau monetary regulations, it is forbidden for any bank or payment institution to provide services to cryptocurrency exchanges. The statement added:

Monetary Authority of Macau reiterates that any institution providing regulated financial services such as currency exchange, cross-border fund transfer and financial exchange platforms without permission violates relevant provisions of the Financial System Act.

Notably, though, the SCMP notes that there are no rules restricting ICO activities in the private sector in the casino hub.

Macau joins a growing number of authorities that are reminding residents that digital currencies such as bitcoin aren’t legal and can be linked to criminal activities. The announcement from the authority also comes at a time when governments are taking a firmer hand as to how operations function. Last September, mainland authorities in China became one of the first to outlaw ICOs, arguing that raising money through cryptocurrencies was not allowed.

Image from Shutterstock.

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