Singapore Officials Quizzed About Crypto Scams Urge Caution

(Bloomberg) -- Singapore officials warned people chasing digital investment opportunities like non-fungible tokens and metaverse assets to exercise caution and participate “responsibly” -- a recommendation that mirrors the city-state’s own balancing act as it promises to embrace crypto, but in a measured way.

Singapore’s government is “closely studying” the characteristics and risks of technologies like blockchain, decentralized finance, NFTs and the metaverse, Minister for Communications and Information Josephine Teo wrote in a reply to a question from parliament member Yip Hon Weng.

“Similar to the physical world, the Government will seek to balance between promoting economic vitality, preserving social stability and protecting public security in the digital domain,” Teo said. She called on individuals and companies to “play their part by participating responsibly in the metaverse.”

Singapore officials have expressed a desire for the nation to become a hub for crypto and financial technology, and numerous companies in the sector have set up regional or global headquarters there. 

However, it’s also approaching the emerging technology with caution: Few applications for licenses to operate a regulated crypto business have been approved, and the vetting process has taken longer than expected. Among companies that failed to secure a coveted permit was an affiliate of Binance Holdings Ltd., the world’s largest cryptocurrency exchange. 

Singapore’s efforts to tame crypto risks come against the backdrop of regulators worldwide moving to exercise greater control over the sector. In Hong Kong, authorities are shifting from an “opt-in” approach to cryptocurrency exchanges to a fully regulated regime. 

Member of Parliament Shahira Abdullah said Singaporeans have lost more than $100,000 on one “gaming craze” called Neko Inu, without specifying whether that was an aggregate amount. She asked Minister for Home Affairs K Shanmugam “what is being done to educate and protect youths from falling prey to cryptocurrency game scams.” 

“When transacting with cryptocurrencies, we urge the public to only deal with entities that are regulated by” the Monetary Authority of Singapore, Shanmugam, who’s also law minister, wrote in a reply Tuesday. “Members of the public should also practice healthy skepticism to ask, check and confirm before making any transactions on cryptocurrency-related platforms, whether they be investment-related, or for online games.”

The police has stepped up its investigation efforts to address these scams, including setting up a cryptocurrency taskforce in 2018 to look into this area, he said. 

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