Singapore Warns on Digital Currencies

Announcements, Crime, FinTech, News | August 11, 2017 By:

The Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD) have issued a warning on the potential risks tied to investment schemes involving digital tokens.

MAS and CAD referred to the rising emergence of initial coin offerings (ICOs) and other investment schemes involving digital tokens in Singapore. The advisory advised members of the public to exercise due diligence to understand the risks associated with ICOs and investment schemes involving digital tokens.

“Consumers should make it a point to understand the product. “Where sellers of digital tokens fail to highlight the risks, consumers should make the effort to find out more information about the underlying project, business or assets,” the advisory stated.

The advisory follows with a list of six “risks” especially pertinent to ICO tokens which consumers should take into account when deciding to invest. These include risks relating to foreign and online operators, sellers without a proven track record, insufficient secondary market liquidity, highly speculative investments, investments promising high returns, and risks of money laundering and terrorist financing.

Consumers can check the MAS Financial Institutions Directory on the MAS website to find out whether an entity is regulated by MAS. Market participants can also look up the MAS Investor Alert List for a non-exhaustive list of entities that may have been wrongly perceived to be regulated by MAS.

MAS said that consumers who suspect that an investment scheme involving digital tokens could be fraudulent should report such cases to the police.