With the rise of bitcoin, cryptocurrencies have captured the popular imagination. Many are now understanding that blockchain technology is here to stay, with others looking at it as a potential investment opportunity. However, it’s important to be aware of both the risks and rewards before getting involved in cryptocurrency trading.
Government officials in Singapore are cautioning the populace to exercise risk awareness when exchanging digital currencies, an activity that has grown increasingly popular in the city-state as well as worldwide. This week, cryptographic forms of money crossed US$2 trillion in the market.
As a result of their non-relationship to economic fundamentals, virtual currencies tend to be highly volatile, said Tharman Shanmugaratnam, administrator of Singapore’s Monetary Authority (MAS), in a composed response to a parliamentary inquiry into the country’s cryptocurrency markeт. “They are hence highly risky as investment products, and certainly not suitable for retail investors.”
The government of Singapore gave the admonition as the government of other Asian countries also takes a harder line on the issue of Bitcoin and other forms of digital money. Japan and Korea also warned their residents about crypto’s possible dangers and entanglements this week. India started expecting organizations to agree to harder financial exposure rules relating to crypto-related dealings this month.
“We are in a crypto bull market, like in 2017, and what happens in these cycles is that a lot of projects of lesser quality appear during these periods,” said Kenneth Bok, a Singapore-based cryptoasset broker and financial backer. “So it is definitely warranted for the authorities to warn the general public to be careful and not to get caught up in the mania with irrational investments.”
Singapore media reported recently that about 100 police reports have been filed against Torque, an online digital money exchange stage run by Singaporean financial expert Bernard Ong. Ong had asserted that a worker had made unapproved exchanges that brought about critical misfortunes for the organization. With Torque, which is being exchanged, thousands of financial backers have had their records suspended, including Singaporeans who lost their life reserve funds.
The Payment Services Act directs computerized installment token specialist cooperatives for the exchange of cryptographic forms of money in Singapore.
“Given their limited scale, these entities are regulated primarily for money laundering and terrorism financing risks,” Shanmugaratnam said. “However, the Act provides MAS the powers to impose additional measures on digital payment token service providers as needed.”
“The crypto assets space is constantly evolving. 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,” Shanmugaratnam said. “Investors, on their part, should exercise extreme caution when trading cryptocurrencies.”
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