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Singapore’s Central Bank, Police Issue Consumer Advisory on ICOs & Digital Currency Schemes

Last Updated March 4, 2021 4:58 PM
Samburaj Das
Last Updated March 4, 2021 4:58 PM

With a consumer advisory, Singaporean authorities are urging citizens to be mindful of potential risks in investing in initial coin offerings (ICOs) and digital currency-related investment schemes.

In a jointly-published advisory on Thursday, the Monetary Authority of Singapore (MAS) And the Commercial Affairs Department (CAD) have urged consumers to exercise due diligence before investing in digital tokens using virtual currencies like Bitcoin and Ether. The MAS is notably Singapore’s financial regulator and central bank while the CAD is the white-collar crimes unit of the Singapore Police Force.

Both authorities pointed to the ‘emergence’ of initial coin offerings involving digital tokens and other digital currency investment schemes in Singapore. Such digital tokens ‘may represent ownership or a security interest over the token seller’s assets or property, or a debt owed by the seller,’ the advisory explains. ‘Such digital tokens have been marketed as investment opportunities.’

Bitcoin and Ether are specifically mentioned as two ‘widely-used’ virtual currencies that are often exchanged for digital tokens during an ICO token sale by developers selling their concept through “a so-called ‘whitepaper’, which is published online”.

More pointedly, an excerpt from the advisory reads:

Consumers should make it a point to understand the product. Where sellers of digital tokens fail to highlight the risks, consumers should make the effort to find out more information about the underlying project, business or assets.

Specifically, the two authorities call on consumers to look into risks related to inexperienced and new sellers, high-return investment schemes, highly speculative investments and more.

The advisory further warns that consumers dealing with individuals or entities that aren’t regulated by the MAS will forgo any consumer protection otherwise afforded to them under the law.

The joint-advisory also called on investors to report any suspicious or fraudulent digital currency investment schemes.

Consumers who suspect that an investment scheme involving digital tokens could be fraudulent should report such cases to the Police.

Featured image of Singapore Police from Shutterstock.