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Wednesday, August 5th, 2020

Singapore issues bitcoin warning after price rise

by December 19, 2017 General


Singapore yesterday issued a warning about cryptocurrencies after a recent surge in prices sent investors flocking to bitcoin.
“The Monetary Authority of Singapore advises the public to act with extreme caution and understand the significant risks they take on if they choose to invest in cryptocurrencies,” the city-state’s central bank said in a statement.
“MAS 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.”
It said the recent spike in bitcoin prices comes from speculation, and cautioned that the bubble may burst.
Singapore’s central bank joins a number of regulators who have warned about cryptocurrency investments, including the US Federal Reserve, which said bitcoin could threaten financial stability.
Regulators in Seoul have banned South Korean financial institutions from dealing in virtual currencies.
The MAS, which also acts as a financial regulator in the city-state, noted that cryptocurrencies are not backed by any central bank and are unregulated, which means those who lose money after investing in them have no room for redress under Singapore law.
“There is also a risk of loss should the cryptocurrency intermediary be hacked, as it may not have sufficiently robust security features,” the regulator said.
Earlier yesterday, a South Korean virtual currency exchange declared itself bankrupt after being hacked for the second time in a year.
The closure comes eight months after nearly 4,000 bitcoin – then valued at 5.5bn won ($5mn), nearly 40% of the exchange’s total assets – were stolen in a cyber-attack blamed on North Korea.
A South Korean exchange trading bitcoin and other virtual currencies declared itself bankrupt yesterday after being hacked for the second time this year, highlighting the risk over cryptocurrencies as they soar in popularity.
The Youbit exchange said it had lost 17% of its assets in the attack yesterday.
“We will close all trades, suspend all deposits or withdrawals and take steps for bankruptcy,” the exchange said in a statement which did not assign blame for the latest attack.
All its customers will have their cryptocurrency assets marked down by 25%, it said, adding it would do its best to “minimise” their losses by using insurance and selling the remains of the firm. The exchange – founded in 2013 – brokered trades of multiple virtual currencies including bitcoin and ethereum.
It is the first time that a South Korean cryptocurrency exchange has gone bankrupt. Investing in virtual currencies has become hugely popular in the hyper-wired South, whose trades account for some 20% of global bitcoin transactions.
About one million South Koreans, many of them small-time investors, are estimated to own bitcoin. Demand is so high that prices for the unit are around 20 percent higher than in the US, its biggest market.
Global bitcoin prices have soared around 20-fold this year. Concerns over a potential bubble have unnerved Seoul’s financial regulators, who last week banned its financial institutions from dealing in virtual currencies.
Global bitcoin prices have soared around 20-fold this year, with the cryptocurrency trading above $18,000 yesterday.
Created in 2009 as a piece of encrypted software, bitcoin been used to buy everything from beer to pizza, and is increasingly accepted by major companies such as online travel giant Expedia.
Analysts have put the surge down to growing acceptance among traditional investors and a decision by US regulators to allow bitcoin futures to trade on major exchanges.
Previously only traded on specialist platforms, bitcoin started trading on the Cboe Futures Exchange earlier this month before hitting the major Chicago Mercantile Exchange (CME) on Monday.