Singapore's financial watchdog considers further restrictions on crypto

The Monetary Authority of Singapore, or MAS, has been “carefully considering” adding restrictions that could affect how retail investors handle crypto, according to one of the government’s senior ministers.

According to parliamentary records published on Monday, Singapore senior minister and MAS chair Tharman Shanmugaratnam said the financial watchdog may consider “placing limits on retail participation” for crypto investors as well as introducing rules on the use of leverage for crypto transactions. Shanmugaratnam also called for regulatory clarity among financial regulators around the world, “given the borderless nature of cryptocurrency markets.”

In January, the MAS barred crypto service providers from advertising or marketing in public spaces, and was behind regulations to shut down crypto ATMs in Singapore — services that seemingly show “cryptocurrency trading being portrayed in a manner that trivialises its risks.” According to the MAS, the country’s Payment Services Act empowers the regulator to impose additional restrictions on crypto service providers ”to ensure better consumer protection, and to maintain financial stability and safeguard the efficacy of monetary policy.”

The financial watchdog said that “recent events” — likely referring to extreme volatility in the prices of major cryptocurrencies including Bitcoin (BTC) — highlighted the risks of crypto investments. On June 30, the MAS reprimanded Three Arrows Capital for allegedly “providing false information and exceeding assets under management threshold.” The Singapore-based company may be facing liquidation amid reports it failed to meet margin calls from its lenders.

MAS today reprimanded Three Arrows Capital Pte. Ltd. for providing false information to MAS, and exceeding the assets under management threshold allowed for a registered fund management company. #enforcement #regulations
Read in full: https://t.co/LXWKTCTymO
— MAS (@MAS_sg) June 30, 2022

Amid the market downturn, the MAS continues to consider giving the regulatory green light to companies handling digital assets in Singapore. In June, the financial regulator granted Crypto.com an in-principle approval, allowing the crypto exchange to provide certain payment services in the country. Crypto companies including Bitstamp Limited, Coinbase Singapore and Gemini Trust have been granted exemptions for having a license in Singapore, while Binance announced plans to shutter its operations in the country in February.