When it comes to the oversight of cryptocurrencies, regulators need to avoid inhibiting innovation, yet be vigilant against manipulation, said U.S. Commodity Futures Trading Commission Chairman J. Christopher Giancarlo.

Speaking to CNBC at the annual Singapore Summit on Friday, he said that the internet flourished because the government did not step in too heavily, and applied a "do no harm" approach.

"And I'm advocating the same approach to cryptocurrencies and all things having to do with this new digital revolution of markets, and of currencies, and of asset classes," Giancarlo said.

But, at the same time, caution is required because some kinds of fraud and manipulation often seen in foreign exchange and precious metals are now taking place in cryptocurrency markets, he said.

"When it comes to fraud and manipulation, we need to be strong. When it comes to policy making, I think we need to be slow and deliberate and well informed," he told CNBC.