Singapore Says Retail Investors Are “Irrationally Unaware” of Crypto Risks, Plans Tougher Rules

A Daenary’s and Co cryptocurrency ATM booth is pictured in Singapore, after the Singaporean crypto ATM operator said it had ceased crypto trading services at its five crypto ATMs to comply to the new guideline from the Monetary Authority of Singapore (MAS) announced on Monday January. 19, 2022. REUTERS/Edgar Su

SINGAPORE, Aug 29 (Reuters) – Singapore plans to introduce new regulations that will make it harder for retail investors to trade in cryptocurrencies at a time when they appear to be “irrationally oblivious” to the risks, the chief said. of its central bank.

Ravi Menon, chief executive of the Monetary Authority of Singapore (MAS), told an event on Monday that despite warnings and measures, surveys show consumers are increasingly trading cryptocurrencies around the world. , not just in Singapore, lured by the prospect of high prices. increase.

“They seem to be irrationally oblivious to the risks of cryptocurrency trading,” he said.

“Adding friction” to retail access to cryptocurrencies was an area MAS was considering, he said.

“These may include client suitability testing and restricting the use of leverage and credit facilities for cryptocurrency trading,” he added during a seminar titled “Yes to digital asset innovation, no to cryptocurrency speculation.”

Singapore’s welcoming approach has helped the financial hub attract digital asset services-related businesses from China, India and elsewhere in recent years, making it a major hub in Asia. Read more

But recent defaults by some Singapore-based global cryptocurrency-related firms, many of which are not subject to financial regulator guidelines on consumer protection or market conduct, have raised concerns over tougher regulation. . Read more

MAS will seek public comment on its proposals by October, Menon said, adding that reviews are underway by regulators around the world.

In January, the MAS issued guidelines to prevent cryptocurrency trading service providers from promoting their services to the public. Read more

Cryptocurrencies have plunged this year as US interest rates rise and runaway inflation prompts investors to abandon riskier assets.

“MAS’ facilitative stance on digital asset activities and restrictive stance on cryptocurrency speculation are not contradictory,” Menon said.

American crypto exchange Gemini and Huobi, a crypto exchange initially focused on China, are among those with a major presence in Singapore.

Around 180 crypto companies applied for a crypto payment license from MAS in 2020 under a new regime, but Singapore has so far only issued around two dozen licenses after an elaborate due diligence process that is still ongoing.

Reporting by Anshuman Daga and Yantoultra Ngui; Editing by Kanupriya Kapoor and Jacqueline Wong

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