Singapore Regulators Make Crypto Trading Hard For Retail Investors

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Singapore Regulators Make Crypto Trading Hard For Retail Investors
  • Singapore’s Central Bank plans to implement ways to make crypto trading challenging for traders.
  • Monetary Authority of Singapore aims to add customer stability tests and restrict credit card facilities to add friction on retail access for crypto.
  • These regulations come in response to Singapore’s current liquidity crisis and proceedings surrounding 3AC.

On August 29, Singapore Central Bank’s Chief said the city-state is planning to introduce new measures to make crypto trading challenging for retail cryptocurrency traders in the nation.

Monetary Authority of Singapore’s (MAS) Managing Director, Ravi Menon stated in a seminar that the regulations “may include customer stability tests and restricting the use of leverage and credit card facilities for cryptocurrency trading,” in an attempt to add friction to cryptocurrency retail access.

He further added that investors have been “irrationally oblivious” when it comes to the risks involved in crypto trading. However, this is not MAS’ first attempt to protect retail crypto investors from the crypto market’s volatility. In January 2022, the regulatory body published guidelines restricting crypto trading services from promoting themselves to interested audiences.

MAS’ decision to tighten crypto regulations in the country is part of their effort to battle the current liquidity crisis in the market, especially in light of the ongoing case with the bankrupt hedge fund Three Arrows Capital.

The Central Bank of Singapore has also issued a detailed questionnaire for all firms holding Monetary Authority’s Digital Payment Token License, in order to collect “highly granular information” about their business activity and financial stability, as reported by Bloomberg.

The MAS aims to obtain critical elements like top lending and borrowing counterparties, the amount loaned, top tokens owned, and the top tokens betted through decentralized finance protocols. Moreover, Menon mentioned that MAS is working on a regulatory framework simultaneously that will supervise “customer protection, market conduct, and reserve backing for stablecoins.”

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