MAS issues warning against cryptocurrencies

The authority said it can't protect investors that lost money from cryptocurrencies.

The Monetary Authority of Singapore (MAS) issued a public warning against cryptocurrencies.

MAS said in a press release that cryptocurrencies are not legal tender. They are not issued by any government and are not backed by any asset or issuer.

MAS considers the recent surge in the prices of cryptocurrencies to be driven by speculation. The risk of a sharp reduction in prices is high.

"Investors in cryptocurrencies should be aware that they run the risk of losing all their capital," MAS said.

MAS also emphasized that it does not regulate cryptocurrencies and there are currently no regulatory safeguards for it in most jurisdictions.

As most operators of platforms on which cryptocurrencies are traded do not have a presence in Singapore, it would be difficult to verify their authenticity or credibility. There is a greater risk of fraud when investors deal with entities whose backgrounds and operations cannot be easily verified.

Cryptocurrency transactions are generally anonymous, which makes them vulnerable to being misused for unlawful activities.

If a cryptocurrency intermediary is found to have used cryptocurrencies illegally, its operations could be shut down by law enforcement agencies. The lack of "robust security features" also causes a risk of loss.

However, "members of the public who lose money from investing in cryptocurrencies will not be able to rely on any protection afforded under legislation administered by MAS," the agency said.

"Before investing in cryptocurrencies, members of the public should carefully consider the claims being made about the products being offered – if the touted ease of making significant profits sounds too good to be true, it probably is. Investors should carefully assess whether an investment in cryptocurrencies is suitable for their investment objectives and risk
appetite," it added.