The Monetary Authority of Singapore (MAS), the country's de facto central bank, has become the latest financial watchdog to issue a warning on the risks of investing in cryptocurrencies.
Citing the recent "speculative" escalation in prices across the crypto markets, MAS has released a statement advising the public to take "extreme caution" if investing in digital currencies such as bitcoin. The authority also stressed that it "does not regulate cryptocurrencies" and that investors must be prepared to face the risk of losing their funds.
Clarifying that cryptocurrencies are "not a legal tender" in the country, MAS stated:
"The Monetary Authority of Singapore advises the public to act with extreme caution and understand the significant risks they take on if they choose to invest in cryptocurrencies."
MAS further noted that there is no regulatory body in Singapore that can safeguard cryptocurrency investments or the "safety and soundness" of cryptocurrency intermediaries.
However, "if a cryptocurrency intermediary is found to have used cryptocurrencies illegally, its operations could be shut down by law enforcement agencies," the central bank added.
The statement follows a previous investor warning from MAS on the risks involved in initial coin offerings (ICOs), published in August.
"If consumers deal with entities that are not regulated by MAS, they forgo the protection afforded under laws administered by MAS," the notice stated at the time.
Other global financial authorities have cautioned investors against bitcoin investments, including the head of Denmark's central bank who warned investors Monday to "stay away" from bitcoin, and described investing in the cryptocurrency as "dangerous".
MAS image via Shutterstock