Shield retail investors from crypto risks

Singapore has a well-earned reputation as a crypto-technology hub. It has encouraged the development of blockchain technologies and has a robust licensing framework for the crypto industry, which is thriving here. But officials from the Monetary Authority of Singapore (MAS) have repeatedly stressed that trading in cryptocurrencies is highly risky and not suitable for the general public. MAS managing director Ravi Menon has cautioned that such assets are unanchored to economic fundamentals and subject to sharp speculative swings which can lead to investors suffering huge losses.

Despite such warnings, some crypto-industry players have continued to promote cryptocurrencies via advertisements in public places as well as online, including through social media. Such promotions are rarely, if ever, accompanied by risk warnings, in violation of Singapore's Payment Services Act, which mandates risk disclosure for financial instruments. Moreover, although the crypto industry is regulated for risks related to money laundering and terrorism financing, there is no legal protection for consumers from mis-selling resulting in trading losses as in the case of traditional financial securities.