Singapore takes measures to make crypto trading difficult for retail investors

Regulatory agencies in Singapore are looking to deter retail traders from investing in the cryptocurrency market. The regulators are tightening their noose over the sector following the rapid growth it has recorded in recent years.

Singapore plans to tame retail crypto trading

On Monday, the managing director of the Monetary Authority of Singapore (MAS), Ravi Menon, said in a seminar that the agency was considering creating friction on retail access to cryptocurrency assets.

The MAS said that some actions that could be taken to achieve this include conducting tests on customer suitability and restricting the use of leverage and credit facilities for trading crypto assets.

The official also said that retail investors were “irrationally oblivious” of the risks associated with trading cryptocurrencies. in January this year, the MAS provided guidelines to restrict crypto companies from promoting services to the public. The restrictions were aimed at protecting retail investors from the volatility of the broader cryptocurrency market.

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MAS’ focus on cryptocurrency regulations

Regulators have been concerned about the cryptocurrency market’s volatility over the years. However, some recent developments in the market have made regulators even more concerned about the crypto space.

Some of the latest developments in the market include the bankruptcy of top crypto companies such as the Celsius crypto lending firm and the Three Arrows Capital hedge fund. The MAS is now taking several measures to harmonize the country’s crypto regulatory framework.

The Central Bank of Singapore has also provided detailed questionnaires to all the companies holding a MAS Digital Payment Token license. A report by Bloomberg said that the objective behind these questionnaires was to obtain detailed information about the activity of the exchange and the crypto holdings of the investigated crypto firms.

The MAS plans to use the questionnaires to assess the financial stability and relationship between cryptocurrency businesses. The bankruptcy filing of Three Arrows Capital has dealt a significant blow to the cryptocurrency market in 2022.

The MAS plans to seek the crucial details of cryptocurrency companies like leading lending and borrowing companies, the top cryptocurrencies owned, and the staked tokens through decentralized finance projects, alongside the amount of money loaned.

In July last month, the MAS chief said they were working on a crypto regulatory framework. The framework will also address several issues such as consumer protection, the conduct of the market, and the backing of stablecoins.

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