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Monetary Authority of Singapore warns against investing in cryptocurrencies

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by December 19, 2017 General

Bitcoin stood at around US$17,980, down more than 5 per cent on the day. — Reuters piBitcoin stood at around US$17,980, down more than 5 per cent on the day. — Reuters piSINGAPORE, Dec 19 — Singapore’s central bank issued a warning against investment in cryptocurrencies today, saying it considers their recent price surge to be driven by speculation and that there is a risk investors could lose all their capital.

The Monetary Authority of Singapore (MAS) said it is “concerned that members of the public may be attracted to invest in cryptocurrencies, such as Bitcoin, due to the recent escalation in their prices”.

“MAS considers the recent surge in the prices of cryptocurrencies to be driven by speculation,” the central bank said in a statement. “The risk of a sharp reduction in prices is high. Investors in cryptocurrencies should be aware that they run the risk of losing all their capital.”

The city-state’s central bank added that there is no regulatory safeguard for investments in cryptocurrencies and that it does not regulate cryptocurrencies.

It urged the public to act with “extreme caution” and to understand the “significant risks” they take on if they invest in cryptocurrencies.

“As most operators of platforms on which cryptocurrencies are traded do not have a presence in Singapore, it would be difficult to verify their authenticity or credibility. There is greater risk of fraud when investors deal with entities whose backgrounds and operations cannot be easily verified,” the MAS said.

Bitcoin set a record high of US$19,666 (RM80,254) on Sunday on the Luxembourg-based Bitstamp exchange, its prices having surged more than 1,700 per cent this year. Today, Bitcoin stood at around US$17,980, down more than 5 per cent on the day.

While Singapore has been an early adopter of fintech, it has not been a major centre for trading cryptocurrencies and none of the big exchanges are based in the city-state. — Reuters

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