MAS considers tighter regulations in Singapore, limiting retail investor participation and leverage in trading

The Monetary Authority of Singapore (MAS) replied to Parliament on July 4th, stating that it is considering implementing stricter cryptocurrency regulations to protect retail investors in the cryptocurrency market.

MAS Statement

Regarding the content of the letter, it is in response to Singapore's parliament inquiry on whether MAS intends to impose further restrictions on cryptocurrency trading platforms to protect individuals who may not fully understand the risks involved in such transactions.

Due to recent events that led to sharp declines in cryptocurrency prices, vividly demonstrating the risks in the crypto market, MAS Managing Director Tharman Shanmugaratnam stated:

"MAS has been seriously considering additional consumer protection measures. These may include restrictions on retail investor participation and rules on leverage in cryptocurrency trading."

While Tharman Shanmugaratnam's remarks indicate a potentially stringent regulatory framework in the future, given the borderless nature of the cryptocurrency market, he also emphasized the necessity for regulatory coordination and cooperation on a global scale, actively engaging with various international standard-setting bodies to discuss relevant issues.

"Cryptocurrencies are highly risky and not suitable for retail investors. People may lose most of their invested capital, and if they borrow money to purchase cryptocurrencies, they may lose even more." MAS reiterated its warning.

MAS Past Policies

In guidelines released by MAS in January this year, restrictions were placed on marketing activities of cryptocurrency service providers, allowing them to promote and advertise their products only on their websites, social media, and applications, even prohibiting the installation of cryptocurrency ATMs to prevent impulsive cryptocurrency trading by the public.

Furthermore, in response to the Three Arrows Capital incident, MAS issued a "reprimand" at the end of June, pointing out multiple violations of securities futures laws by Three Arrows Capital and questioning the fund's ability to meet its payment obligations.