Wednesday , April 14 2021

As the world warms to Bitcoin, Singapore warns the public against crypto

Singapore has once again warned the public about the dangers of trading cryptocurrencies like Bitcoin. It has grown significantly over the past year, albeit relatively small in the city-state.

“Cryptocurrencies can be very volatile and their value is usually not linked to any economic principle,” said Thurman Shanmugaratnam, chairman of the Monetary Authority of Singapore, in a parliamentary question on Monday. They are therefore very risky as investment products and certainly not suitable for retail investors. ”

He said cryptocurrency funds are not allowed to sell to retail investors. MAS also has the power to impose additional measures on digital token service providers, which will regulate cryptocurrency trading, if necessary, said Dharman, senior minister for senior policy and coordinating minister for social policy.

With the total market value of cryptocurrencies surpassing US $ 2 trillion (RM8.2 trillion) for the first time, Thurman’s statement comes as corporate demand has doubled in two months. Bitcoin is shedding tears as investors struggle with crypto as a way to increase returns on money in a world with interest rates close to zero, and Tesla Inc. said last month that it would use it as a payment for cars.

Cryptocurrency trading in Singapore is relatively small compared to stocks and bonds, with 2% of the average daily trading volume of the major stock exchanges last year, Bitcoin, Ethereum and XRP combined, said Thurman.

Risks of money laundering

While the likes of Elon Musk, Mark Cuban and Paul Tudor Jones have endorsed cryptocurrencies, Thurman is not the only regulator concerned with an industry where fraud is still a concern. An EU watchdog recently warned of “significant” investor risks in the wake of Bitcoin profits, and Gary Jensler, head of the Securities and Exchange Commission, said in his affidavit that ensuring the crypto market is free of fraud is a challenge for the agency.

Meanwhile, Thurman said the Singaporean authorities have taken steps to deal with cryptocurrencies against the risks of money laundering and financing of terrorism.

Among the actions taken by MAS, Thurman said the crypto sector has increased surveillance to identify suspicious networks and further risky activities. MAS continues to raise awareness about the risks of investing in digital assets to prevent fraud or “unintentional use of donkeys”.

“The crypto asset space is constantly evolving,” Thurman said. “MAS has closely monitored developments and will regulate regulation to ensure that it is effective and responsive to potential risks. Investors must be very careful when trading cryptocurrencies. ”- Bloomberg

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