SINGAPORE CAUTIONS AGAINST INVESTMENTS IN CRYPTOCURRENCIES
SINGAPORE– The Monetary Authority of Singapore (MAS) has advised the public to be cautious and understand the significant risks they take on if they choose to invest in crypto-currencies.
In a statement yesterday, MAS said, it was concerned the public may be attracted to invest in crypto-currencies, such as bitcoin, due to the recent escalation in their prices.
Cryptocurrencies are not legal tender. They are not issued by any government and are not backed by any asset or issuer, it said.
MAS considered the recent surge in the prices of crypto-currencies to be driven by speculation.
The risk of a sharp fall in prices is high. Investors in cryptocurrencies should be aware that they run the risk of losing all their capital. There is no regulatory safeguard for investments in cryptocurrencies, it said.
As in most jurisdictions, MAS said, it did not regulate crypto-currencies.
It said its regulations were not extended to the safety and soundness of cryptocurrency intermediaries or the proper processing of cryptocurrency transactions.
MAS said that as most operators of platforms on which cryptocurrencies were traded did 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.
Cryptocurrency transactions are generally anonymous, which makes them vulnerable to being misused for unlawful activities, it said.
MAS said if a crypto-currency intermediary was found to have used cryptocurrencies illegally, its operations could be shut down by law enforcement agencies.
There is also a risk of loss should the cryptocurrency intermediary be hacked, as it may not have sufficiently robust security features, it said.
The public who lost money from investing in cryptocurrencies would not be able to rely on any protection afforded under legislation administered by MAS.
Before investing in crypto-currencies, the public should carefully consider the claims being made about the products being offered � if the touted ease of making significant profits sounds too good to be true, it probably is, it said.
MAS said investors should carefully assess whether an investment in cryptocurrencies was suitable for their investment objectives and risk appetite.
It said the public who suspected that an investment involving cryptocurrencies could be fraudulent or misused for other unlawful activities, should report such cases to the police.
For more information on cryptocurrencies and cryptocurrency investments, the public can refer to MoneySENSE’s consumer alerts, it said.
A cryptocurrency is a form of digital token secured by cryptography and typically used as a medium of exchange, a unit of account or a store of value. Examples of cryptocurrencies include Bitcoin, Ether and Litecoin, it said.
Source: NAM NEWS NETWORK