Singapore Trade Minister: 'Consumers Should Stay Clear of Cryptocurrencies'

Singapore Trade Minister Alvin Tan said the public should "stay clear" of cryptocurrencies altogether, because there are no protections in place if they lose money.

Tan was responding to having been asked why the government has tightened regulations on exchanges—and barred investors from purchasing digital assets using their credit cards.

His warning arrives just as Singapore Prime Minister Lawrence Wong has had to issue warnings that deepfakes of his image are being used to promote crypto scams and money-making schemes.

He added that anyone who has fallen victim to one of these scams should contact the police.

Tan made his own remarks about avoiding crypto altogether before Parliament. He said they are "highly volatile and speculative in nature, and are usually not anchored on any fundamental value."

He sits on the board of the Monetary Authority of Singapore, which has "consistently issued public warnings that dealing in cryptocurrencies is highly risky and not suitable for the general public."

Tan explained that the restrictions imposed by the MAS also extend to leverage, which is when traders borrow funds to amplify a trading position.

"If an individual uses his credit card to purchase cryptocurrencies, he could be borrowing from the credit card, which attracts a higher rate of interest than other forms of credit," he said. "If the value of the cryptocurrency falls, he may suffer substantial losses and be unable to pay off his credit card debt, with the higher rate of interest compounding his debt."

Earlier this week, a Singaporean MP argued that the city-state is too soft on crypto fraudsters, and harsher punishments should be enforced given digital assets now account for 25% of all fraud-related losses.

According to the Lianhe Zaobao newspaper, Tan Wu Meng called for thieves to be sentenced to caning, as well as fines and jail time.

Edited by Stacy Elliott.