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Singapore is warning the public about the risks of trading cryptocurrencies. Tharman Shanmugaratnam, the chairman of the Monetary Authority of Singapore, in response to a parliamentary question on Monday said,
“Cryptocurrencies can be highly volatile, as their value is typically not related to any economic fundamentals.” “They are hence highly risky as investment products, and certainly not suitable for retail investors.”Crypto funds are not authorized for sale to retail investors, he added. Tharman, a senior minister and coordinating minister for social policies, said the MAS has powers to impose additional measures on digital asset service providers, under which crypto exchanges are regulated, as needed. At the beginning of the last year, Singapore introduced new payments legislation, The Payment Services Act, which allows the global crypto firms to expand their operations in the country by applying for operating licenses. MAS Chairman's comments came as the total cryptocurrency market cap surged past $2 trillion amidst the rising prices while BTC continues to trade around $58,500. While crypto trading in the country surged significantly over the past year, it remains small compared to traditional markets. The combined peak daily trading volumes of Bitcoin, Ether, and XRP accounted for just 2% of the average daily trading volume of securities on the main stock exchange last year, said Tharman. Amidst all this, authorities have stepped up efforts to combat money-laundering and terrorism financing risks associated with crypto assets, he said. In similar news, Singapore-based crypto trading platform Torque is shutting down after at least 70 police reports were lodged against it as investors claimed to lose millions in cryptos. For this, MAS is raising awareness on the risks of investing in crypto and has increased surveillance of the sector to identify suspicious networks and higher-risk activities that may need further scrutiny, Tharman said.
“The crypto-assets space is constantly evolving.” “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.”