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‘Don’t see it as a get-rich-quick scheme’: How to avoid crypto scams and losses

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SINGAPORE: When Ms Goh joined cryptocurrency buying and selling platform Torque — as a result of a few of her buddies had been on it — payouts had been higher than rates of interest that banks had been providing. There was additionally an opportunity that the cryptocurrencies would recognize in worth, she mentioned.

The platform regarded secure and seemed to be run by “respected folks”, added the investor, who declined to provide her full title.

Bother surfaced, nevertheless, as Chinese language New 12 months approached this 12 months. After a 12 months of payouts that arrived like “clockwork”, which for her labored out at 0.014 per cent a day, they stopped.

Torque, which was integrated within the British Virgin Islands, suspended traders’ accounts and went into liquidation.

Traders reported the platform to the police, and its chief government Bernard Ong claimed that an worker’s unauthorised buying and selling actions had led to vital losses in traders’ accounts, The Straits Instances reported.

Investors including Ms Goh reported cryptocurrency trading platform Torque to the Singapore police.

Ms Goh was a kind of who made a police report.

Ms Goh misplaced about S$30,000, she instructed the programme Money Mind.

Whereas there are traders who’ve made large features from Bitcoin and different cryptocurrencies in recent times, others have misplaced sizeable financial savings by means of poor funding selections or scams.

READ: Meet the Singapore-based crypto investor who bought a S$93m artwork

Singapore police acquired 533 experiences of crypto-related dishonest, fraud or different crimes between 2018 and final 12 months, of which 393 had been made final 12 months. Traders misplaced round S$29 million.

That is regardless of Financial Authority of Singapore (MAS) warnings that cryptocurrencies are risky and “extremely dangerous” funding merchandise unsuitable for retail traders.

READ: Commentary: Will Bitcoin become mainstream currency in Singapore one day?

Specialists instructed Cash Thoughts the primary dangers are dangerous investments in obscure cash, stepping into crypto initiatives that fail and falling for scams.

Cryptocurrencies are volatile and highly risky investment products, says the MAS.

Cryptocurrencies are risky and extremely dangerous funding merchandise, says the MAS.


Apart from the unregulated nature of crypto, scammers are utilizing tales of people that have struck it wealthy to “play on the greed of traders”, mentioned Choo Oi Yee, chief industrial officer for personal capital platform ADDX.

Two varieties of scams are the Ponzi scheme, whereby cash from new traders serves as returns for earlier traders, and the “pump and dump”, she cited.

The latter happens when scammers purchase a coin and generate noise or deceptive statements to push its value up, solely to dump it after others begin shopping for.

Scammers may additionally use third-party accounts to cowl their tracks, mentioned Hong Qi Yu, the founder and chief government of digital buying and selling platform Tokenize Xchange.

Mr Hong Qi Yu is the founder and chief executive of digital trading platform Tokenize Xchange.

Mr Hong Qi Yu.

They might accomplish that by hacking into the accounts, by coercing weak people to permit their accounts for use or through the use of unsuspecting people as cash mules.

This can be a extra refined tactic that can be utilized by syndicates to penetrate compliance frameworks and circumvent Know Your Buyer checks that each one banks and crypto exchanges should do, mentioned Mr Hong.

Maintaining with the ever-evolving techniques of scammers is a problem, so legit operators should improve their surveillance to identify uncommon actions, he added.

One other safeguard is to have “scorching” and “chilly” crypto wallets, he cited. The chance of the latter being hijacked is far decrease as a result of its key — a string of characters — that unlocks entry to the crypto is disconnected from the Web.

Tokenize Xchange has stepped up surveillance on its platform.

Tokenize Xchange has stepped up surveillance on its platform.

Crypto is advanced, and traders who need some publicity to it ought to do their homework, mentioned Ms Choo. Retaining danger diversification in thoughts, they might additionally not wish to make investments quite a bit in it.

Extra conventional monetary establishments are beginning to look into providing crypto funds or crypto-type merchandise, which she mentioned would provide a safer method to put money into crypto “as a result of there are just a few layers of safety, regulation and evaluate”.

Cryptocurrency service suppliers are regulated in Singapore beneath the Cost Providers Act, primarily for cash laundering and terrorism financing dangers.

Senior Minister Tharman Shanmugaratnam, the Minister-in-charge of the MAS, mentioned in April that the central financial institution has been monitoring developments within the crypto property house and can proceed to adapt its guidelines to “be sure that regulation stays efficient and commensurate with the dangers posed”.

WATCH: Crypto scams: Find out how to defend your self in opposition to cryptocurrency fraud (7:27)

At present, digital fee token service suppliers don’t want a licence to function beneath the Cost Providers Act whereas their functions — submitted earlier than July final 12 months — are being reviewed.

The exemption stays till these functions are authorised or rejected or withdrawn by the applicant. No licence has been issued thus far, however “a number of functions are within the remaining phases of evaluate”, Mr Tharman mentioned in a parliamentary reply this week.

READ: Bitcoin ATMs are coming to a gas station near you

READ: Can cryptocurrencies and their vast energy use co-exist with Singapore’s green goals?


People who have gotten burnt in investments have these pointers for would-be crypto traders.

Ms Goh mentioned that after Torque went into liquidation, she was “very fortunate” that her cash on one other crypto platform appreciated in worth, and she or he was capable of purchase extra.

Bitcoin hit a record high of nearly US$65,000 (S$88,000) in April.

Bitcoin hit a document excessive of practically US$65,000 (S$88,000) in April.

She believes crypto is right here to remain and has learnt to commerce on her personal. “Study what you’re shopping for. That’s crucial,” she mentioned.

Discover ways to use the (crypto) alternate as a result of totally different exchanges have totally different charges. It can save you quite a bit on charges when you’re utilizing the best alternate for the best cash.

One other investor, Andy (not his actual title), learnt an “costly and painful lesson” from an preliminary coin providing rip-off.

In 2018, an entrepreneur buddy invited him to be a part of the general public sale of a brand new digital token, so he transferred Ethereum, one other cryptocurrency, to the buddy and acquired the brand new tokens.

After the preliminary coin providing, the tokens “turned nugatory at a really quick velocity, and the worth of the coin didn’t return up”, Andy mentioned. “That was once I realised that it was a rip-off.”

Crypto investor Andy (left, not his real name) speaks to CNA's Chor Khieng Yuit.

Crypto investor “Andy” (left) speaks to CNA’s Chor Khieng Yuit.

He and one other buddy misplaced a complete of 35 Ethereums, which had been value about S$1,100 every on the time. The lack of about S$38,500 was roughly a fifth of their internet value.

Andy knew he had no authorized recourse as a result of crypto was not regulated and “nothing was written down on paper”.

After the expertise, he determined that he would make investments solely in “very liquid” cryptocurrencies, comparable to Bitcoin and Ethereum.

Traders ought to do their due diligence, he mentioned. The place doable, they need to test whether or not monetary entities are licensed or on any investor alert lists.

“Your entire blockchain and cryptocurrency house is extremely risky. And the expertise behind it is vitally obscure, so except you’re extremely captivated with this entire panorama, don’t see it as a get-rich-quick scheme,” he added.

“The second factor is, when folks strategy you (about) funding alternatives and (if) it sounds too good to be true, more often than not it’s.”

Watch this section of Money Mind here. New episodes each Saturday at 10.30pm.

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