Singapore Regulator Considers Limiting Crypto Exposure for Retail Traders

The Monetary Authority of Singapore (MAS) is looking to bolster consumer protections as bears continue dominating the crypto market. Specifically, the regulator mulls introducing new rules that would further limit crypto exposure for retail traders.

In a written response to MP Murali Pillai who asked if the regulator plans to introduce further restrictions for crypto trading platforms to protect unsophisticated users, MAS Chairman Tharman Shanmugaratnam said:

MAS has been carefully considering the introduction of additional consumer protection safeguards. These may include placing limits on retail participation, and rules on the use of leverage when transacting in cryptocurrencies.

However, Shanmugaratnam said the borderless nature of cryptocurrencies requires regulatory coordination and cooperation globally. He added that discussions about such efforts are already underway and MAS is an active participant in the talks.

MAS Maintains Crypto Investments Aren’t Suitable for the Public

Shanmugaratnam further noted that MAS believes crypto investments are not ideal for the broader public.

According to him:

Since 2017, MAS has consistently warned that cryptocurrencies are not suitable investments for the retail public. Most cryptocurrencies are subject to sharp speculative price swings. Recent events have vividly demonstrated the risks, with prices of several cryptocurrencies falling drastically.

Shanmugaratnam pointed out that MAS has been actively restricting the marketing and advertising of cryptos in public spaces. He added that the regulator warned crypto firms against advertising cryptos while trivializing the associated risks.

Per Shanmugaratnam, Singapore-based digital payment token (DPT) firms are subject to the Payment Services (PS) Act. This law primarily seeks to mitigate money laundering and terrorism financing risks. However, it also empowers MAS to impose more measures on DPT firms to protect investors.

Singapore-based Crypto Firms Tumble Amid the Bear Market

The news of MAS mulling more restrictions comes after Singapore-based crypto hedge fund Three Arrows Capital (3AC) became insolvent. Reportedly, a British Virgin Islands court ordered the company’s liquidation in the past week.

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Before the news of 3AC’s liquidation became stale, Vauld, a Singapore-based crypto lender, halted operations, citing “financial challenges.” The company has hired financial and legal advisors to help with its restructuring.

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