MAS
A view of the Monetary Authority of Singapore's headquarters in Singapore Reuters

The Monetary Authority of Singapore advised the public to act with extreme caution and understand the significant risks they take on if they choose to invest in cryptocurrencies.

MAS said it was concerned that members of the public may be attracted to invest in cryptocurrencies, such as Bitcoin, due to the recent escalation in their prices.

In an advisory issued on Tuesday, the central bank said that cryptocurrencies are not legal tender as they are not issued by any government and are not backed by any asset or issuer.

MAS said it considers the recent surge in the prices of cryptocurrencies to be driven by speculation.

"The risk of a sharp reduction in prices is high. Investors in cryptocurrencies should be aware that they run the risk of losing all their capital," MAS said in a statement.

Members of the public who lose money from investing in cryptocurrencies will not be able to rely on any protection afforded under legislation administered by MAS, the central bank cautioned.

South Korea's spy agency said North Korean hackers were behind attacks on cryptocurrency exchanges this year, stealing some 7.6 billion won (S$9.43 million) worth of cryptocurrencies.

A South Korean cryptocurrency exchange - Youbit - is to file for bankruptcy after it was hacked for the second time this year.

Cryptocurrency transactions are generally anonymous, which make them vulnerable to being misused for unlawful activities, according to MAS.

"There is also a risk of loss should the cryptocurrency intermediary be hacked, as it may not have sufficiently robust security features."