Singapore Financial Watchdog Considers Further Restrictions on Cryptocurrencies

Singapore Financial Watchdog Considers Further Restrictions on Cryptocurrencies

The Monetary Authority of Singapore, or MAS, has been “carefully considering” adding new restrictions that could affect how retail investors deal with cryptocurrencies, according to one of the senior government ministers.

According to parliamentary records released on Monday, Singapore’s top minister and MAS chairman, Tharman Shanmugaratnam, said the financial watchdog might consider “establish limits on retail participation” for investors in cryptocurrencies, as well as introducing rules on the use of leverage for cryptocurrency transactions. Shanmugaratnam also called for regulatory clarity among financial regulators around the world, “given the borderless nature of cryptocurrency markets.”

In January, the MAS banned cryptocurrency service providers from mounting advertising or appearing in public spaces, and was behind regulations to shut down cryptocurrency ATMs in Singapore, services that ostensibly portray “cryptocurrency trading in a way that trivializes its risks.” According to MAS, the country’s Payment Services Law empowers the regulator to impose additional restrictions on crypto service providers “to ensure better consumer protection, and to maintain financial stability and safeguard the effectiveness of monetary policy.” .

The financial watchdog said that “recent events” — likely referring to the extreme price volatility of major cryptocurrencies, including Bitcoin (BTC) — highlighted the risks of cryptocurrency investments. On June 30, MAS reprimanded Three Arrows Capital for allegedly “providing false information and exceeding the assets under management threshold.” The Singapore-based company could face liquidation amid news that it was unable to meet margin calls from its lenders.

Amid the market slump, MAS continues to study the possibility of giving the green light to companies that handle digital assets in Singapore. In June, the financial regulator granted approval in principle, allowing the cryptocurrency exchange to provide certain payment services in the country. Cryptocurrency companies such as Bitstamp Limited, Coinbase Singapore, and Gemini Trust have received exemptions from having a license in Singapore, while Binance announced plans to close down operations in the country in mid-February this year.

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