Singapore DPM Heng Swee Keat Warns Retail Investors Against Cryptocurrency Trading

Singapore’s Deputy Prime Minister Heng Swee Keat warns retail investors against cryptocurrencies during the Asia Tech Summit on May 31, 2022. (PHOTO: Roslan RAHMAN / AFP)

SINGAPORE — Singapore’s Deputy Prime Minister Heng Swee Keat has warned retail investors to “steer clear” of cryptocurrencies following the recent Terra Luna crash which saw investors lose their life savings .

That said, the crypto asset space, while highly risky, still had the potential to transform the future of finance, Heng, who is also the economic policy coordination minister, said Tuesday (March 31) during the opening of Asia Tech x Singapore. Summit 2022.

“We must continue to adapt our rules to ensure that regulation continues to facilitate innovation, while addressing the key risks posed by crypto assets,” Heng added.

The DPM’s warnings to retail investors echo calls from the Monetary Authority of Singapore, which has consistently warned the public against trading in cryptocurrencies.

In January, the MAS released guidelines to discourage cryptocurrency trading, including how digital payment token service providers should not promote their crypto services to the general public. It was on the basis that crypto trading was very risky and volatile.

In April, Singapore passed a law requiring virtual asset service providers that only do business overseas to be licensed.

The recent crash of TerraUSD and Luna, which saw the cryptocurrency plummet more than 99% earlier this month, underpinned the warning.

Terra, which ranked among the top 10 most valuable cryptocurrencies, fell below $1 on May 11, after peaking near $120 last month. Some investors later took to the Reddit forum to report how much they had lost, with life savings lost.

The collapse triggered ripple effects on Bitcoin and other cryptocurrencies, Heng noted.

“Retail investors in particular should avoid cryptocurrencies. We can’t stress that enough,” Heng said.


However, the digital asset ecosystem included a range of services beyond cryptocurrency trading, and the Singapore government remained “committed to working with blockchain and digital asset players to encourage innovation and strengthen confidence in the sector,” he said.

MAS has granted licenses and approvals in principle to 11 digital payment token service providers over the past two years. These include stablecoin players such as Paxos, Coinhako, and financial institution DBS Vickers.

“We will continue to evaluate applications and facilitate live experiences through regulatory sandboxes, to enable safe adoption in the financial industry,” Heng added.

As part of the digital asset initiatives, Heng also launched Project Guardian, which he said was a “collaborative effort by MAS to partner with the industry to explore the tokenization of financial assets and develop the future of financial infrastructure”.

The industry’s first pilot project will be to explore the potential applications of decentralized finance (DeFi) in wholesale funding markets.

“In short, we need to approach emerging technology with an open mind, separating hubris from its true underlying potential,” he said.

“Through regulation, we are working constructively to realize the gains of these new technologies and partnering responsible and innovative players with strong risk management capabilities to lay the foundation for the digital asset ecosystem,” added Heng.

Separately, Heng also introduced two new programs that harness quantum technology to solve “real-world challenges.”

The two initiatives in the quantum engineering program are the National Quantum Computing Hub, which will strengthen talent development, and the National Quantum Fabless Foundry, which will support the micro and nanofabrication of quantum devices in partner cleanrooms.

“Our investment in quantum computing and quantum engineering is part of our approach of trying to anticipate the future and proactively shaping the future we want,” Heng said.

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Singapore DPM Heng Swee Keat Warns Retail Investors Against Cryptocurrency Trading

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