The Monetary Authority of Singapore Weighs In on Crypto Transactions

The Monetary Authority of Singapore could impose restrictions on the amount that retail investors can use fpr crypto transactions and impose rules on leverage, among other possible actions.

The Monetary Authority of Singapore, or MAS, has been “considering” adding restrictions that could affect how retail investors deal with crypto, according to one of the government's senior ministers.

According to parliamentary records published on Monday, Singapore senior minister and MAS chairman Tharman Shanmugaratnam said that the financial watchdog may consider placing limits on retail participation for crypto investors and introduce rules on the use of leverage for crypto transactions. He also called for regulatory clarity among financial regulators around the world, "given the borderless nature of cryptocurrency markets."

In January, the MAS prohibited crypto service providers from advertising or marketing in public spaces, and was behind regulations to shut down crypto ATMs in Singapore — services that seemingly portray “cryptocurrency trading being shown as not risky.” The Payment Services Act allows the regulator to impose additional restrictions on crypto service providers "to ensure better consumer protection, and to maintain financial stability and uphold monetary policy."

The financial watchdog said that “recent events” — likely referring to extreme volatility in prices of major cryptocurrencies including Bitcoin (BTC) — highlighted the risks of crypto investments. On June 30, the MAS reprimanded Three Arrows Capital for allegedly "providing false information and exceeding assets under management threshold." The Singapore-based company may be facing liquidation amid reports it failed to meet margin calls from its lenders.

The MAS is still considering whether to allow companies that handle digital assets in Singapore to operate. In June, the financial regulator gave an in-principle approval, allowing it to provide certain payment services in the country. The following crypto companies have been granted exemptions for having a license in Singapore: Bitstamp Limited, Coinbase Singapore and Gemini Trust. In February, Binance announced plans to close its operations there.