Singapore is one of the most crypto-savvy countries in the world, with over 40% of citizens owning (or having once owned) cryptocurrency in 2025.
This local interest in the crypto world can be attributed to the profitability of these digital assets. One look at the growth chart of Bitcoin from inception to this year is all you need to see to figure out why this digital token (and other cryptocurrencies) is so popular.
As fascinating and fast-growing as crypto is, this financial space requires a different security approach from traditional markets and investment opportunities in more ways than one.
For one, crypto is decentralised. While this freedom from institutional oversight is a positive for many, it also makes crypto tokens inherently vulnerable to security lapses, scams, and hacking incidents. It’s also extremely hard to recover stolen money, making preventative measures crucial to safeguarding your assets.
While Singapore has regulations and laws in place to protect its citizens from financial downfalls, it’s not exempt from risks. Let’s take a look at the safety levels of crypto exchanges in Singapore and what local institutions and regulatory bodies are doing to maintain them.
Singapore’s Crypto Landscape and Primary Crypto Licensor
Singapore has one of the most tightly regulated financial landscapes in Asia. Its stance on cryptocurrency is also fairly well-developed. Moreover, Singapore notably doesn’t outright ban the exchange of cryptocurrencies; instead, it allows it to flourish by pushing forth crypto exchanges with the proper licenses.
While cryptocurrency isn’t recognised as legal tender in the city state, it shares a positive outlook and is seen as a viable asset class by many citizens. This perception, in conjunction with the robust local ecosystem platforming digital assets, makes Singapore a premier ground to trade and invest in various cryptocurrencies.
To operate a crypto exchange in Singapore, businesses need to first comply with strict regulatory requirements and secure the appropriate licenses and certifications before they can legally begin operations. This is good for incoming investors as it gives them peace of mind and security knowing that their funds are handled properly.
The primary regulatory body that handles crypto is the Monetary Authority of Singapore (MAS). This government body focuses on keeping the local financial system safe and stable. It’s also responsible for overseeing digital assets and exchange platforms and ensuring they comply with local regulations. This regulatory setup doesn’t just build trust for users, it also keeps shady operators out of the system. In turn, this allows the best crypto exchange in Singapore and other licensed exchanges to remain operational.Â
The PS Act: The Main Regulatory Framework for Crypto Exchanges in Singapore
The 2019 Payments Services (PS) Act is a regulatory statute from the Parliament of Singapore that came into effect on January 28, 2020. It’s responsible for overseeing and modernising a wide range of payment-related services, with one notable classification being digital payment systems such as cryptocurrency exchange platforms.
Under this Act, crypto exchanges operating within the country must first be registered and licensed in order to operate within the country and serve Singaporeans. This is to ensure customer protection and avoid any criminal misuse of the funds from shady operators.
Some of the key regulatory provisions outlined in the 2019 PS Act include the following:
- Licensing framework: The PS Act 2019 has categorised three types of licenses for different crypto business types to ensure that they operate with customer and financial protection in mind.
- Registration for DPT service providers: This act has also legislated that DPT providers must first be duly registered before they can conduct the buying, selling, or exchange of cryptocurrency in the country. This is to prevent money laundering and terrorist financing.
- Anti-money laundering: The PS Act has also set safeguards in place to prevent crypto exchange operators from potentially stealing funds or using their platform to facilitate intentional theft or criminal misuse of money.
- Stricter cybersecurity measures: MAS requires businesses to create more robust security systems and frameworks to uphold consumer protection and limit financial and investment risks common in the cryptocurrency space.
Besides that, the MAS will continue to monitor and audit filings annually for this PS Act to ensure that it’s up to date and relevant as the crypto landscape dynamically shifts and evolves.
Furthermore, this regulatory body will also ensure that licenses will be suspended and inspected as needed, ensuring that only verified operators can continue to be used by the public in Singapore.
Potential Risks of Investing in Crypto in Singapore
While Singapore’s regulatory environment is strong, investors aren’t immune to the risks permeating this digital space. Crypto-related fraud is prevalent and fast-growing, and fraudsters are targeting Singaporeans among many other people in this anonymous and well-connected arena.
In fact, according to reports, over $1.1 billion SGD have been lost due to crypto-related scams in 2024. Since crypto theft can be devastating and difficult to recover from, it’s crucial for holders to recognise common scams and take precautions to protect themselves from potential losses.
As they say, prevention is better than a cure. So here are the potential risks associated with crypto investing.
- Custody Risk
Custody risk is when a user loses access rights to their chosen crypto exchange. This can spring from a wide range of problems, but it typically boils down to insolvency or a management error in the platform’s part.
One example of a significant platform failure is the FTX collapse. In such situations, cryptocurrency kept in the exchange’s internal wallet may not be accessible. This, in turn, could lead to a loss of one’s holdings.
- Data Breach
Data breaches are another common security risk that could leave your funds vulnerable if kept inside these crypto exchange platforms.
This event is one wherein sensitive user information gets leaked or accessed by hackers or unscrupulous third parties.
This user information, which may contain things such as names, email addresses, usernames, passwords, and even wallet addresses, can lead to a vulnerability in one’s internet presence. While Singapore has strict data protection laws, this may still happen, especially if conducted from outside the country.
- Cyberattacks
Cyberattacks like DDoS attacks and malware can penetrate exchange platforms and cause the company to go offline or lose millions of their customers’ crypto tokens.
This can also lead to users being on the edge regarding the platform or cryptocurrency in general, shaking this digital asset’s reliability in the eyes of these investors.
- Volatility of Tokens
Some cryptocurrencies can rise and fall at speeds faster than expected. One example is the private coin LUNA in 2022, which was once a top 10 token that has now fallen into oblivion.
In such cases, the cryptocurrency platform isn’t to blame. However, if the platform doesn’t have safeguards in place like a stop-loss feature, this could lead to big losses for an unprepared investor that could have otherwise been prevented.
How to Stay Safe When Trading Crypto in Singapore
Knowing the common crypto scams is one thing, but safeguarding oneself from them is a totally different ball game.
If you want to keep yourself and your funds out of reach from scammers and phishers, here are some tips on staying protected when navigating the Singapore crypto scene.
- Stick to MAS-licensed operators: Narrow your options to platforms registered with MAS. These platforms have passed a rigid set of rules to operate in the country legally. Use them to ensure you’re not using any suspicious businesses.
- Turn on security features: Enable two-factor authentication (2FA) and use a strong password with numbers, letters, and symbols. This helps ensure that your account will have few vulnerabilities for hackers to intercept and break in.
- Be wary of strangers’ messages: Don’t click suspicious links or accept any offers that may seem too good to be true. Be wary of tactics that can threaten your funds to avoid getting scammed.
- Don’t leave your money on exchanges: Don’t leave a large sum of money in the exchange. Keep it in a more secure hot or cold wallet to make it less accessible to hackers.
- Use secure devices and networks: Refrain from using public Wi-Fi networks and shared devices (like public computers) to access your crypto-trading account. Furthermore, ensure that your device’s anti-virus systems are updated to prevent missing out on potential oversights.
Singapore may have robust safeguards and policies in place to protect consumers from crypto scams, but the bulk of the responsibility lies on the individual. As such, be sure to follow these tips so that you can increase your chances of keeping your crypto safe at all times.
Stay safe out there!
