Singapore has unveiled new regulations, as reported by Bloomberg, aimed at curbing retail speculation within the crypto market. These measures, proposed by the Monetary Authority of Singapore (MAS), encompass restrictions prohibiting individual investors from leveraging funds for trading purposes. Furthermore, digital payment token service providers are now barred from incentivizing retail trading or facilitating financing, margin, or leverage transactions.
MAS Introduces Measures Against Retail Speculation
The MAS, in its statement released on Thursday, has extended these regulations to encompass all investors, irrespective of residency status. This move represents a significant expansion in Singapore’s efforts to protect retail investors from potential risks associated with cryptocurrency trading.
Scheduled to be progressively introduced from mid-2024 onwards, the expanded measures are primarily designed to shield investors from the speculative nature of crypto assets. The aim is to mitigate potential financial risks that could arise from high-profile crypto incidents, such as the recent collapse of hedge fund Three Arrows Capital (3AC), by distancing the nation from speculative activities in the digital asset sphere.
Read more: Singapore Has Banned The Founders Of Three Arrows Capital From Trading For 9 years
Singapore’s Drive Towards Safer Crypto Trading
Under the new guidelines, digital payment token service providers are now restricted from accepting locally issued credit card payments. Moreover, incentives such as referral programs and educational rewards are also included within the purview of these restrictions.
The MAS stressed the inherently speculative and high-risk nature of digital asset trading, advising individuals to exercise caution and avoid dealings with unregulated entities, including those operating overseas, to safeguard their investments.
This regulatory framework, which followed extensive feedback received by the MAS on its initial proposals unveiled in October 2022, requires firms operating within the digital payment token services to ensure high system availability and recoverability, akin to standards imposed on traditional banks. Additionally, these firms must establish robust procedures to address customer complaints and resolve disputes, thus fortifying consumer protection within the crypto industry.
With these measures, the MAS aims to secure retail investors, uphold market integrity in the crypto domain, and reinforce Singapore’s position as a reliable global financial hub.
According to CoinGecko data, the global cryptocurrency market cap currently stands at $1.37 trillion, experiencing a 2.73% change in the past 24 hours, indicating fluctuations in the overall market valuation. Meanwhile, Bitcoin (BTC) maintains a market cap of $732 billion, constituting roughly 49.46% of the total crypto market cap. The leading cryptocurrency trades at $37,000, reflecting a 2% gain over the past 24 hours.