Singapore Floats Stricter Rules to Discourage Crypto Retail Trading

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Singapore’s central bank, the Monetary Authority of Singapore (MAS), has published its final responses to feedback on proposed regulations for crypto companies operating in the city-state. The proposals include business conduct rules and limits on retail investor access aimed at curbing consumer harm from crypto speculation.

Under the new policies, companies will be expected to determine customers’ risk awareness before granting access, refusing to offer trading incentives, financing, margin, or leverage, declining locally-issued credit card payments, and limiting crypto holdings in calculating net worth.

“While these business conduct and consumer access measures can help meet this objective, they cannot insulate customers from losses associated with the inherently speculative and highly risky nature of cryptocurrency trading,” said Ho Hern Shin, MAS Deputy Managing Director of Financial Supervision.

The measures will be implemented through regulations starting in mid-2024. They also include requirements for conflict of interest disclosure, token listing policies, customer complaint procedures, and technology risk management.

Shin urged consumers to exercise extreme caution with digital token services and avoid unregulated offshore entities altogether. The MAS previously categorized crypto as unsafe investments in the city-state due to excessive volatility.

However, MAS has shown some openness to emerging crypto companies. In recent months, MAS granted licenses to both Ripple and Coinbase, allowing them to offer digital payment token services, and international and domestic money transfer services in Singapore.

Additionally, MAS published a whitepaper exploring digital asset interoperability through collaboration between banks like JPMorgan and HSBC and crypto companies like Chainlink and Ava Labs.

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