Singapore Warns Public Against Crypto as World Warms to Bitcoin

“Cryptocurrencies can be highly volatile, as their value is typically not related to any economic fundamentals,” Tharman Shanmugaratnam, the chairman of the Monetary Authority of Singapore, said in response to a parliamentary question on Monday. “They are hence highly risky as investment products, and certainly not suitable for retail investors.”

He said that cryptocurrency funds are not authorized for sale to retail investors. The MAS also has powers to impose additional measures on digital token service providers, under which exchanges offering the trading of cryptocurrencies are regulated, as needed, according to Tharman, who is also senior minister and coordinating minister for social policies.

Tharman’s comments come as the total market value of cryptocurrencies pushed past $2 trillion for the first time, doubling in about two months amid surging institutional demand. Bitcoin has been on a tear as investors dabble in crypto as a way to boost returns on cash in a world of near-zero interest rates, with the likes of Tesla Inc. saying last month it will accept its use as payment for cars.

Cryptocurrency trading in Singapore remains small compared to shares and bonds, with the combined peak daily trading volumes of Bitcoin, Ethereum and XRP accounting for 2% of the average daily trading volume of securities on the main stock exchange last year, Tharman said.

  • READ MORE ON CRYPTOCURRENCIES IN THE REGION:
  • Crypto Market Cap Doubles Past $2 Trillion After Two-Month Surge
  • Singapore Launches New Regime for Crypto, Payments Firms
  • DBS to Start Members-Only Digital Bourse for Crypto Assets
  • Rich Crypto Investors Going Alone Gets Goldman Off Sidelines
  • A 33-Year-Old Fueling Crypto Boom Is Worrying Thai Regulators
  • Singapore-Run Crypto Trading Platform Torque Shutting Down: ST
  • Money Laundering Risks
  • Your guide to a life well spent
  • Sign up for the Wealth weekly newsletter.

Bloomberg may send me offers and promotions.

By submitting my information, I agree to the Privacy Policy and Terms of Service.
While the likes of Elon Musk, Mark Cuban and Paul Tudor Jones have endorsed cryptocurrencies, Tharman isn’t the only regulator to express caution about an industry where fraud is still a concern. A European Union watchdog recently warned of “significant” investor risks after Bitcoin’s gains, and Gary Gensler, the nominee to lead the Securities and Exchange Commission, said in his confirmation hearing that ensuring the crypto market is free of fraud is a challenge for the agency.

Meanwhile, authorities in Singapore have stepped up efforts to combat money-laundering and terrorism financing risks associated with cryptocurrencies, Tharman said.

Among the measures it has taken, the MAS has increased surveillance of the crypto sector to identify suspicious networks and higher-risk activities that may need further scrutiny, Tharman said. MAS is also continuing to raise awareness on risks of investing in digital assets to help people avoid being cheated or “inadvertently used as mules,” he said.

“The crypto assets space is constantly evolving,” Tharman said. “MAS has been closely monitoring developments and will continue to adapt its rules as needed to ensure that regulation remains effective and commensurate with the risks posed. Investors, on their part, should exercise extreme caution when trading cryptocurrencies.”

By Alex Alena

Alex Alena has been the lead news writer at Cryptocurrency Updates. With a degree in communications, Matt has an uncanny ability to make the most complex subject matter easy to understand.