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Singapore’s financial regulators once again warn their public about the risks of the cryptocurrency industry as the world is warming up to the crypto coins like Bitcoin. The cryptocurrency market’s significance increased over the past year despite its small size.
Tharman Shanmugaratnam, the chairman of the Monetary Authority of Singapore, said in response to a parliamentary question, “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.”
He also explained that the crypto funds are not yet allowed to be sold to investors or even to retailers. The Monetary Authority of Singapore (MSA) has the authority to enforce measures on the digital currency service provider. These measures can regulate the crypto exchanges that offer the trading of digital currency. The Chairman gave his views that the industry is in need of regulations.
These concerns by the MSA came as the market value of the cryptocurrency hits $2 trillion for the first time. However, trading of cryptocurrency in Singapore still remains little in comparison to bonds and shares. Cryptocurrency might have been supported by famous personalities like Elon Musk, Mark Cuban, and Paul Tudor but the regulatory authorities are still concerned about the risks of fraud attached to the crypto world.
— Yahoo Singapore (@YahooSG) April 6, 2021
A European Union’s financial regulator has recently warned about the rising investor risks. The nominee to lead the Securities and Exchange Commission, Gary Gensler, has given his views about the industry saying that ensuring the fraud-free crypto market will be a demanding task for the agency.
Singapore’s government and financial regulators are also working towards eliminating the money laundering and terrorism financing risks linked to the cryptocurrency market. The measures taken by the financial regulators of the country include the requirement of the crypto sector to identify and investigate high-risk activities. MAS is also working towards raising awareness of risks related to crypto investments. It is also assisting the public in how to avoid fraud or become money mules through crypto-related activities.
“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.”