Monetary Authority of Singapore Considers New Restrictions on Crypto Firms

29 August 2022, 10:45 GMT+0000
Updated by Kyle Baird
29 August 2022, 10:45 GMT+0000
In Brief
  • Singapore's central bank chief says digital currency markets need to be governed globally.
  • The message comes three days after Singapore-registered Three Arrows Capital filed for bankruptcy.
  • The authority has already placed limits on marketing and advertising cryptocurrency services.
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The Monetary Authority of Singapore (MAS) is considering new ways to protect consumers and reduce the risks associated with digital currency firms. The MAS’ new rules might include customer suitability tests and cutting the use of leverage and credit facilities by retail investors who want to trade these digital assets.

According to a Bloomberg report, the authorities have already put regulations on the advertising and marketing of digital currency tokens. The new regulations are being mulled over to further safeguard the interest of consumers as well as reduce risks. At present, cryptocurrency platforms are licensed as digital payment token (DPT) services under the Payment Services Act.

This allows the regulating authority to take extra measures to make sure there are better consumer protections in place, financial stability is maintained, and the efficacy of monetary policy is not compromised. 

This follows the collapse of crypto hedge fund Three Arrows Capital (3AC), which was fined by the MAS for providing false information and for exceeding its asset management limit, as well as a subsequent warning from the agency.

Crypto regulation in Singapore

The Singaporean government has created the Monetary Authority of Singapore to regulate and administer virtual currencies. The public is becoming increasingly concerned about cryptocurrency investment scams, and the regulator is stepping in to provide oversight and standards for individuals. The MAS has continuously stressed to investors that cryptocurrencies are highly dangerous, with investments being unsuitable for the public.

In January, the MAS issued suggestions limiting the public advertising of cryptocurrency trading services. Following a ban on cryptocurrency automated teller machines (ATMs) in Singapore in January, operators of those machines began shutting down their ATMs.

Singapore is working to be known as the go-to place for blockchain technology and cryptocurrency innovation. With a clear regulatory system with well-defined laws, Singapore has been attracting crypto companies from across the globe.

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Legislative changes

Senior Minister Tharman Shanmugaratnam, Minister in charge of the MAS, recently addressed concerns about whether Singaporeans were exposed to the Terra collapse. Although Tharman said that “MAS is currently reviewing its strategy to the regulation of stablecoins,” more changes may be on the way for the industry as legislation improves tighter.

Meanwhile, Terra believes that judicial management is the best long-term course of action for its users, considering the current market conditions.

Disclaimer

The information provided in independent research represents the author's view and does not constitute investment, trading, or financial advice. BeinCrypto doesn’t recommend buying, selling, trading, holding, or investing in any cryptocurrencies