Singapore is considering bringing more restrictions on retail cryptocurrency trading as the market is witnessing a plunge in value and the crumbling of several companies.
“MAS has been carefully considering the introduction of additional consumer protection safeguards,” wrote the Chairman of the Monetary Authority of Singapore (MAS), Tharman Shanmugaratnam in a response to a question by the city-state’s parliament.
Additionally, he mentioned that the upcoming rules might include placing limits on retail participation and limits on the use of leverage in cryptocurrency trading.
“Given the borderless nature of cryptocurrency markets, however, there is a need for regulatory coordination and cooperation globally. These issues are being discussed at various international standard-setting bodies where MAS actively participates,” Shanmugaratnam added.
Center to the Latest Market Turmoil
Singapore is the base of several cryptocurrency startups. However, several major collapses due to the ongoing market slump occurred to companies based in the city-state.
Terraform Labs, which rattled the crypto industry with the collapse of its USD-pegged algorithmic stablecoin , is based in Singapore. In addition, it is the home to Three Arrows Capital, the crypto hedge fund that is now facing liquidation. Most recently, Vauld, another Singapore-based crypto lending and trading platform, suspended withdrawals and other services and is now considering restructuring.
However, Singapore’s authority was always cautious with the growing cryptocurrency market. MAS has been issuing warnings against the volatile market since 2017, stating “cryptocurrencies are not suitable investments for the retail public.”
Further, the regulator imposed heavy curbs on crypto promotions within its jurisdiction last January. It restricted the marketing and advertising of cryptocurrency services in public areas, which prompted several companies to take down ads from public transport venues and remove crypto ATMs.
Crypto startups, to operate from Singapore, need to obtain a license from the MAS. The process is considered to be rigorous as only 14 firms have been granted permission to operate locally so far, out of around 200 applicants.
