By Suvashree Ghosh and Joanna Ossinger
(Bloomberg) — A senior Singapore central bank official is repeatedly warning cryptocurrency firms that policymakers will clamp down hard on crypto players who fan speculation in the country.
Sopnendu Mohanty, chief fintech officer at the Monetary Authority of Singapore reminded the traders to be careful about how they lure customers. “Reduce your enthusiasm and be mindful of who you are selling to,” Mohanty said on Friday at an office opening ceremony of Cobo, a digital asset custody provider. “Singapore is not a place to speculate. We will be very, very hard on this behaviour.”
Less than 24 hours earlier, Mohanty had taken on crypto players at the Token2049 conference, calling out the many exhibitor booths set up around the site for what he saw as a lack of attention to the potential dangers of operating in the crypto space.
“Look at what the advertisements say. None of them talk about risk,” he said, singling out a booth near the stage that he felt had an overly bold slogan. “Consumer awareness is a big challenge for us now. We’ve got to repeatedly let the market know this asset class is not suitable for retail investors.”
Mohanty’s comments echo concerns voiced by MAS Managing Director Ravi Menon, who said in a speech last month that the monetary authority “regards cryptocurrencies as unsuitable for use as money and as highly hazardous for retail investors.” They also reiterate remarks Mohanty made in June about how the city-state would be hard on bad actors in the space.
“We got caught up in this narrative of cryptocurrency without getting into the purpose part of the cryptocurrency,” Mohanty said in separate remarks at the Milken Asia conference on Thursday. “If I have a cryptocurrency, what am I going to do with that? Apart from speculation. We’ve got to start thinking from that side. The currency ran ahead of the purpose it’s supposed to serve.”
A series of high-profile crypto collapses and market meltdowns this year have prompted warnings from the MAS and government officials. Some of the biggest casualties of the crypto downturn, such as hedge fund Three Arrows Capital, operated out of Singapore. Vauld, Zipmex and Hodlnaut all sought protection from creditors after being unable to meet their financial obligations.
An early proponent of crypto regulation, Singapore attempted to establish itself as a hub for global digital-asset companies long before similar pronouncements by countries like the UK. But Singapore’s authorities struggled to find a way to incorporate digital assets into its financial system in a way that protected retail investors from crypto’s wild fluctuations and bouts of intense speculation.
Still, over the course of the comments, Mohanty did strike an optimistic tone occasionally. He said Singapore wants to encourage more uses of digital assets in the country, just with no speculation or bad behaviour.
“The number of intellectual property filed on blockchain is by far 10 times more than the second best,” which is artificial intelligence or AI, Mohanty said at the Milken conference. “Which means the best and brightest are focusing on this sector. And they’re going to change the future.”
©2022 Bloomberg L.P.