What has happened?
Singapore’s central bank has urged the public to act with “extreme caution” if buying cryptocurrencies.
What does this mean?
The Monetary Authority of Singapore (MAS) has issued an official statement, advising "the public to act with extreme caution and understand the significant risks they take on if they choose to invest in cryptocurrencies".
"MAS is concerned that members of the public may be attracted to invest in cryptocurrencies, such as bitcoin, due to the recent escalation in their prices," the statement said.
The central bank considers that the recent increase in the price of cryptocurrencies comes from speculation, and cautioned investors that prices may drop, meaning they could lose their capital.
“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 repeated that cryptocurrencies do not constitute legal tender.
It added that there is no regulatory safeguard for investments in cryptocurrencies and that it does not regulate them either.
"Nor do MAS regulations extend to the safety and soundness of cryptocurrency intermediaries or the proper processing of cryptocurrency transactions."
Should investors lose money from investing in cryptocurrencies, they will not be able to seek redress under Singaporean law either.
MAS urged the public "who suspect that an investment involving cryptocurrencies could be fraudulent or misused for other unlawful activities" to report this to the Police.
Singapore’s central bank joins an ever-increasing list of regulators that have warned about cryptocurrency in recent months, including in Danemark, Finland, Hong Kong, India and France.
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