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MAS plans stricter crypto regulation, warns investors against risks

Tuesday 30 August 2022 14:42 CET | News

Monetary Authority of Singapore (MAS) officials have stated that the regulator is planning to roll out new regulations that will make it more difficult for retail investors to trade cryptocurrencies.

 

The plans develop as MAS specialists assessed retail investors as being ‘irrationally oblivious’ about the risks related to crypto trade. According to Reuters, Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said at an event on 29 August 2022 that despite warnings and measures, surveys show that consumers are increasingly trading in cryptocurrencies globally, not just in Singapore, attracted by the prospect of sharp price increases.

The MAS official reportedly continued to explain that additional risks associated with crypto trade may include ‘customer suitability tests and restricting the use of leverage and credit facilities for cryptocurrency trading.’ he added at a seminar titled 

Monetary Authority of Singapore (MAS) officials have stated that the regulator is planning to roll out new regulations that will make it more difficult for retail investors to trade cryptocurrencies.

 

‘Yes to digital asset innovation, No to cryptocurrency speculation.’

Singapore's approach to crypto trade has helped the financial hub attract digital asset services-related companies from China, India in the last couple of years, rendering it a significant centre in Asia. However, recent defaults of some global cryptocurrency-related firms based in Singapore, many of which are not subject to the financial regulator's guidelines on consumer protection or market conduct, has triggered worries about tighter regulation. 

In January 2022, the MAS issued guidelines to limit cryptocurrency trading service providers from promoting their services to the public. Regulators at the MAS have reportedly said they hope to encourage crypto-related services, a sharp contrast with China's ban, a crypto tax in India that has crippled trading, and incoming rules in Hong Kong restricting crypto investing to professionals.

The MAS will seek public feedback on its proposals by October 2022, MAS officials have stated for Reuters, adding that reviews are ongoing by regulators globally.

Crypto and its 2022 rollercoaster

According to KPMG data cited by Reuters, investment in Singapore's crypto and blockchain companies surged to USD 1.48 billion in 2021, ten times increase compared to 2020 and nearly half the Asia Pacific total for 2021.

In contrast, cryptocurrencies have plunged in 2022, as US interest rate increases and runaway inflation prompt investors to ditch riskier assets. US crypto exchange Gemini and Huobi, a crypto exchange initially focused on China, are among those with a major presence in Singapore. 

About 180 crypto companies applied for a crypto payments licence to the MAS in 2020 under a new regime but Singapore has handed out only about two dozen licences so far after an elaborate due diligence process that is still going on.


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Keywords: cryptocurrency, cryptocurrency exchange, crypto asset, FX
Categories: DeFi & Crypto & Web3
Companies: MAS
Countries: Singapore
This article is part of category

DeFi & Crypto & Web3

MAS

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