The Monetary Authority of Singapore (MAS) has issued a warning to consumers against investment in cryptocurrencies, saying that the surge in price of cryptocurrencies is mainly due to speculation and the risk of prices nosediving is high.
The regulator highlighted that cryptocurrencies are not legal tender and said that cryptocurrency transactions are more vulnerable to fraud as they are generally anonymous.
Also, majority of cryptocurrency trading platforms do not have a Singapore presence that makes it tough to verify their credibility, MAS said.
For instance, in 2014, Tokyo-based bitcoin exchange Mt. Gox lost 850,000 bitcoins worth over $450m. The loss was blamed on hackers.
“There is no regulatory safeguard for investments in cryptocurrencies. As in most jurisdictions, MAS does not regulate cryptocurrencies. Nor do MAS regulations extend to the safety and soundness of cryptocurrency intermediaries or the proper processing of cryptocurrency transactions,” the watchdog noted.
The regulator has therefore, warned people investing in cryptocurrencies to be aware of the risk of losing all their capital.