Knowledge Hub
Risks of Dealing with Unregulated Entities
Offshore or unlicensed platforms may offer high returns—but carry high risks and little recourse.
Some cryptocurrency companies operate outside local regulations, often based overseas. While they might offer attractive promotions or high returns, using unlicensed providers comes with significant risks. If problems arise, it can be very difficult to resolve them due to limited consumer protections and complex fund recovery processes.
Unregulated or offshore platforms may not follow important safeguards like anti-money laundering (AML) rules, cybersecurity standards, or consumer protection measures. This raises the chances of fraud, weak security, insolvency, or sudden shutdowns. Unlike exchanges regulated by Singapore’s Monetary Authority of Singapore (MAS), these platforms lack strict licensing and oversight.
To reduce your risks:
Always verify a platform’s licensing status and reputation before trading.
Prefer regulated exchanges licensed under Singapore’s Major Payment Institution (MPI) or Standard Payment Institution regimes.
Avoid investing based on hype, social media influencer tips, or promises of unusually high returns from unlicensed platforms.
Know your personal risk tolerance and invest only what you can afford to lose.
Key takeaways:
Licensed exchanges offer stronger legal protections and comply with regulatory standards.
Unregulated exchanges expose you to higher risks and limited recourse if issues arise.
Choosing MAS-regulated platforms ensures better AML, cybersecurity, and consumer safeguards.
Be wary of hype-driven investments and influencer endorsements, especially on unregulated platforms.