A cryptocurrency called Dubaicoin that surged 1000% in the 24 hours since its launch today crashed 50% after the government of the Emirate warned investors it was not approved by the authorities there.
Dubaicoin caused a huge stir in crypto markets when it launched earlier this week, claiming to be “the official digital currency of Dubai.”
It claimed it was powered by a blockchain developed in the region called ArabianChain.
However, ArabianChain denies any involvement.
The Dubai Media Office said in a tweet this morning: “Dubaicoin cryptocurrency was never approved by any official authority.
“The website promoting the coin is an elaborate phishing campaign that is designed to steal personal information from its visitors.
“Dubai does not currently have an official cryptocurrency.”
Major listing platforms removed the crypto from their pages.
Such events have repeatedly damaged the reputation of cryptocurrencies, to the frustration of those in the industry lobbying regulators to approve their use.
Elsewhere in crypto markets, Bitcoin, ether, dogecoin and others all fell sharply today, making Dubaicoin’s earlier gains all the more shocking.
Bitcoin fell nearly 8% to almost $36,000 this afternoon having fallen as low as $35,414 at one point.
Swissquote analyst Ipek Ozkardeskaya said investors were piling out of crypto and into “meme” stocks — those fuelled by social media buzz.
The analyst predicted busy weekend trading for Bitcoin, particularly if it fell below $30,000, which they see as a key level for traders.