Singapore’s financial watchdog is considering whether to tighten crypto rules after a $2 trillion market rout that exposed firms in the city-state - and beyond.
The Monetary Authority of Singapore (MAS) is assessing whether it should curb access to the crypto market, public statements made Monday in the city-state parliament indicate. Among the options being considered are potential limits on exposure in the retail segment and leverage rules for cryptocurrency transactions.
«MAS has been carefully considering the introduction of additional consumer protection safeguards,» said MAS chairman Tharman Shanmugaratnam in a response to a question by a member of parliament that was subsequently transcribed and published on the regulator's website.
«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.»
Early Warning
Shanmugaratnam said the regulator has «consistently warned» since 2017 that the sector is not suitable for retail investors given they are prone to speculative price swings.
«Recent events have vividly demonstrated the risks, with prices of several cryptocurrencies falling drastically,» he said.
He defended MAS's recent actions related to the market, saying that it went further than other regulators earlier this year when it restricted cryptocurrency marketing activities and requested that cryptocurrency ATMs be removed from public areas.
Crypto Downturn
Since a $2.9 trillion peak in November last year, the crypto market has seen roughly $2 trillion in value erased, triggering financial widespread financial difficulties for numerous crypto firms worldwide. In Singapore alone, those most heavily affected are stablecoin creator Terraform Labs, hedge fund Three Arrows Capital (finews.asia previously reported on its ostensible dissolution), and lender Vauld.
At the same time, the city-state continues to promote the industry. It issued a further three in-principal approvals for token licenses in June to cryptocurrency exchange Crypto.com, digital currency broker Genesis, and digital assets solutions firm Sparrow. In total, the MAS has now issued 14 such license approvals out of a total of 196 applicants.
Despite this, the MAS chairman did not mince his words to parliament, reiterating its warning that «cryptocurrencies are highly risky and are not suitable for the retail public. People can lose most of the money they have invested, or more if they borrow to purchase cryptocurrencies».
