Security issues aside I don't think it's unreasonable for the Singaporean police to examine the source of the funds in this case.
The buyer was purchasing about 35 BTC which is unusual. It is even more unusual to purchase the BTC using cash in a hotel room.
Usually this type of Over the Counter (OTC) transaction would pay using a wire transfer and some sort of escrow service to make sure each side holds up their part of the arrangement.
Singapore is a major financial center which has a higher usage of crypto than in the West so I'm sure the police were wondering why this 'business transaction' was processed in this manner.
Other than theft, it's possible that another illegal activity may be underlying to this transaction. It could possibly be money laundering or money to be used for the purchase of illegal material such as drugs etc. The amount is too huge, even for a big time investor. Even if it were in fiat, the authority would find the amount to be suspicious and even if the theft did not occur, it should still be looked into.