Senior Minister Tharman Shanmugaratnam’s observations on cryptocurrency and the need for regulation are spot on (‘Very clear’ cryptocurrencies have to be regulated to guard against money laundering: Tharman, Jan 20).

There is a pressing need for crypto investors to look beyond the hype and base their decisions on a sound analysis of compelling crypto-use cases that either meet a current demand, or create and sustain a new type of demand.

Crypto investors need to be woken up to the reality that the mere novelty of crypto cannot in and of itself be a sufficient basis for an investment.

There is also the question of what decentralisation means in the crypto universe and the conundrum this poses in terms of accountability and regulation. Specifically, crypto and crypto-related services should be regulated according to the risks they represent to investors.

This could mean, for example, clarifying crypto exchanges’ scope of activities to determine which regulatory framework they fit into. If investors expect a return from their crypto investments in some form, this should be sufficient to assume that a principal-agent relationship is involved, which requires proper regulation.

Until a robust legal and regulatory framework is established and standardised internationally for the benefit of all, caveat emptor, or buyer beware, has to remain every crypto investor’s constant refrain.

Woon Wee Min