Singapore Ministers Call for Caution on NFTs and the Metaverse
Singapore ministers have urged Singaporeans to exercise caution in dealing with non-fungible tokens (NFTs) and other digital assets in the Metaverse.
Member of Parliament, Yip Hon Weng, posed a question for written answer during the Parliament sitting on 11 Jan 2022 with questions on whether the Singapore Government was planning to regulate such technologies. The answer provided was that due to the Metaverse and NFTs being in their early development stages, "especially in terms of their translation to real or physical world applications", caution was advised.
"As these technologies are still at relatively early stages of application, it remains to be seen how they will be structured and organised," Minister for Communications and Information Josephine Teo wrote. "The government is closely studying their characteristics and attendant implications and risks. For example, the immersive, interactive, decentralised or anonymity elements of these technologies have the potential to be harnessed to either strengthen or pose risks to online safety, consumer protection, privacy, and protection of intellectual property."
This call for caution regarding NFTs and technologies associated with the Metaverse isn't without reason. In December 2021, Member of Parliament Shahira Abdullah said that Singaporeans had lost more than $100,000 in cryptocurrency to a crypto game called "Neko Inu".
Neko Inu was a crypto game that promised players the ability to earn five per cent on their Tether (USDT) cryptocurrency every day. Additionally, players who referred other people to play the game would also get a part of their returns whenever they purchased and sold their pets.
However, the game's developers "pulled the rug" on players after its servers were taken down and restored following a server maintenance announcement to fend off online attacks that includes a distributed denial-of-service (DDOS) attack. Players suddenly found their USDT had been converted to Neko$ - a token not listed on any crypto exchange. This conversion means that players wouldn't be able to cash out their earnings or assets.
A case similar to Neko Inu happened back in May 2021 when the NFT fighting game "Evolved Apes" was reported to have disappeared with US$2.7 million worth of Etherium a week after the game went live. However, although criminal charges have been filed against the game's developer, Evil Ape, there might not be a case against him due to players receiving the NFTs they paid for.
"At the end of the day, any promises of a game or other development fall out of the scope of your purchase," said Jdmjem, an administrator of the Fight Back Apes Discord.
The MCI isn't the only government office to caution about dealing with NFTs and other similar technologies. Kasiviswanathan Shanmugam, Singapore's Minister for Home Affairs and Minister of Law, recently said that the best defence for cryptocurrency scams in online games is "a discerning public" while citing the "Neko Inu" scam. To achieve this, Minister Shanmugam mentioned that the Singaporean government would step up public education efforts to educate the public on cryptocurrency-related scams.
"When transacting with cryptocurrencies, we urge the public to only deal with entities that are regulated by the [Monetary Authority of Singapore]," Minister Shanmugam said. "Members of the public should also practise healthy scepticism to ask, check and confirm before making any transactions on cryptocurrency-related platforms, whether they be investment-related, or for online games. If the offer from an investment platform or online game appears too good to be true, it could be a scam."