Singapore, SINGAPORE – The Singapore government has always been open to cryptocurrency trading and blockchain technology, making Singapore one of the top three countries in the world for Initial Coin Offerings (ICO) as well as home to some of the world’s largest cryptocurrency exchanges such as Huobi. In growing signs of just how much the global financial center has moved towards inducting cryptocurrencies into the mainstream, on May 25, the government, through its official website, released a guide for retail investors in cryptocurrencies. Until recently, the government has warned retail investors to generally stay away from cryptocurrencies, citing their highly speculative nature, volatility and absence of regulations, the guide is the boldest move yet by the island nation.
For the most part, the guide is educational and informative, putting in layman terms, the nature of cryptocurrency investments as well as the risks associated with them. But what is interesting is how the Singapore government approaches the lack of regulation, stating clearly that while there is no legislative protection for those who lose money investing in digital tokens such as through ICOs,
“This doesn’t mean that the Government isn’t taking steps to ensure that digital tokens are not used as tools for fraud or other crimes.”
Yet after spelling out all the pitfalls and risks that a cryptocurrency or ICO investor could face, a series of logical and sequential steps is provided for would-be cryptocurrency or digital token investors to use should they decide to invest in the nascent financial market.
As with any investment due diligence is necessary, so the government has advised cryptocurrency and digital token investors to:
- Do your homework – make sure you fully understand the benefits and risks of the product or service.
- Make a thorough assessment on whether the features of the product or service are suitable to your needs.
- Before finally committing to an investment, you should ask, check and confirm.
- Ask as many questions as you need to fully understand the investment.
- Check and double-check if the information provided to you (e.g. company’s track records, owners and directors’ experience and qualifications) is actually true, and whether there are any complaints or negative comments made about the investment opportunity (whether in the news or on online forums.
- Confirm the legitimacy of the seller or its representative’s credentials with external resources such as:
- MAS’ Financial Institutions Directory
- MAS’ Register of Representatives
- Investor Alert List
The cryptocurrency investor guide, while not meant to be an exhaustive handbook on how to invest in one of the fastest growing financial asset classes in the world, at least provides Singaporean investors with a starting point for exploring this area. The move is responsible and ought to be welcome by the investing community as well as retail investors. The Singapore government has always taken an enlightened approach towards cryptocurrencies, recognizing the need to temper investor protection with the importance of creating a conducive environment to foster innovation. This initiative to proactively release a cryptocurrency investment guide is another sign of that learned approach and one more step towards bringing cryptocurrency investment to the masses.