Police reports of crimes related to cryptocurrency investments have soared since 2018.
In response to queries from The Straits Times, the police said 393 reports of cheating, fraud or other crimes related to investments in cryptocurrencies were made last year.
That number was more than three times that in 2019, when 125 reports were made, and a massive jump from the 15 reports in 2018.
Around $29 million was lost in such cases between 2018 and 2020.
The director of the non-profit Centre for Strategic Cyberspace and International Studies, Mr Anthony Lim, told ST that cryptocurrencies are popular for use in illicit practices because they are mostly unregulated by governments.
He said: "These scammers and perpetrators play on a potential victim's greed or need for cash or inability to resist making a quick buck, despite it seeming too good to be true, and impatience to gain the goodies.
"Many of those who fall victim are not vigilant and don't do due diligence prior... We are talking about thousands of dollars of one's hard-earned money here; vigilance and due diligence is the least they could do before plunging."
He added that diligence would include understanding how cryptocurrencies work, knowing the person or company offering the deal, and running checks on the seller's legitimacy with the Monetary Authority of Singapore (MAS).
Earlier this month, Senior Minister and Coordinating Minister for Social Policies Tharman Shanmugaratnam said in a written reply in Parliament that the MAS has repeatedly cautioned that investing in cryptocurrencies is risky and not suitable for retail investors.
"Those who choose to trade in cryptocurrencies should therefore understand the significant risks they are taking on, and verify the credentials of the entities involved before dealing with them," he said in response to Tanjong Pagar GRC MP Joan Pereira's questions on measures to limit the exposure of retail investors to these highly risky products and how the Government will work with individuals and families to spot signs of distress in victims and to assist them.
National financial education programme MoneySense last month launched a campaign to raise awareness of the risks of investment scams involving cryptocurrencies and online trading.
Consumers are taught to spot red flags such as the promise of quick and substantial profits, and are reminded to follow steps to check the legitimacy of the entity marketing the product before making any investment.
Number of police reports of cheating, fraud or other crimes related to investments in cryptocurrencies made last year.
Number of such police reports made in 2019.
These steps consist of asking as many questions as the buyer needs to understand the investment opportunity, and being wary if the company is unable to answer, or avoids answering, any questions; checking on the company, its owners, directors and management members; and confirming the company's and representatives' credentials by using available resources.
These resources include:
• the Financial Institutions Directory, which is a list of financial institutions regulated by MAS and the regulated activities they are authorised to provide (https://eservices.mas.gov.sg/fid);
• the Register of Representatives - a list of individuals who conduct activities regulated by the MAS on its website (http://www.mas.gov.sg); and
• the Investor Alert List - a list of people unregulated by the MAS who may have been wrongly perceived as being licensed or authorised by the authority (http://www.mas.gov.sg/ial).