Singapore Strengthens Regulations on Cryptocurrency Trading
Singapore Takes Tough Stance Against Crypto Speculation
In a move to further restrict retail speculation in cryptocurrencies, Singapore has proposed additional regulations such as barring individual investors from borrowing to trade. The Monetary Authority of Singapore (MAS) announced the new measures on Thursday, expanding its retail rules to encompass all investors regardless of residency. The central bank also specified that digital payment token service providers won’t be allowed to offer any incentives for retail trading in cryptocurrencies or provide financing, margin, or leverage transactions. They also won’t be able to accept locally issued credit card payments, according to the MAS statement.
Gradual Phasing In of Measures
The expanded regulations are set to be gradually phased in from mid-2024. This indicates Singapore’s determination to distance itself from speculation in digital assets, especially after being hit by a series of high-profile crypto blowups like the collapse of hedge fund Three Arrows Capital.
Warning Against Unregulated Entities
Although the proposed measures aim to protect retail investors, MAS’ deputy managing director for financial supervision, Ho Hern Shin, emphasized that they “cannot insulate customers from losses associated with the inherently speculative and highly risky nature of cryptocurrency trading.” Shin also cautioned against dealing with unregulated entities, including those based overseas, to safeguard against potential risks.
Final Guidelines and Additional Requirements
The final guidelines come after the MAS received feedback on its proposals for digital payment token services that were released in October last year. Additional requirements expected to be imposed on crypto firms include maintaining high availability and recoverability of critical systems, similar to the standards imposed on banks. Crypto firms should also have processes in place to handle customer complaints and resolve disputes, the MAS said.
This move comes as Singapore solidifies its position as one of Asia’s main crypto hubs while also taking proactive steps to protect investors from potential risks associated with cryptocurrency trading. The MAS is committed to implementing robust regulations to ensure the stability and security of the crypto market in Singapore.
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