Singapore eyes more regulation to protect retail investors from crypto winter fallout

The Monetary Authority of Singapore (MAS) is considering new regulations to protect retail investors after the crypto market crash led to the collapse of several crypto firms.

According to the regulator, the new rules being considered include “placing limits on retail participation, and rules on the use of leverage when transacting in cryptocurrencies.”

MAS continued that there is a need for global collaboration to better police the crypto industry due to the ‘borderless nature’ of its market.

The regulator also rehashed some of its previous efforts to protect retail investors from the crypto industry, like warnings that crypto is not for retail investors and the restriction of crypto ads that do not emphasize the risks of such investment.

Singapore-based crypto companies in the market crash

The new warning by the regulator is unsurprising considering the role Singapore-based companies like Terraform Labs and Three Arrows Capital played in the crypto market crash.

MAS reprimanded Three Arrows Capital (3AC) for exceeding the limit for assets under management and providing false information about its operations. The regulator is investigating whether the hedge fund breached other rules.

A concerned citizen filed a police report against Terraform Labs, the developers of the crashed Terra tokens, LUNA and UST.

Vauld, a crypto lender in the country, suspended withdrawals due to liquidity issues. The firm has hired advisers as it considers restructuring.

Singapore’s mixed crypto signals

Authorities in Singapore are walking the thin line between consumer protection and openness to crypto.

Sopnendu Mohanty, MAS’ chief fintech officer, in a LinkedIn post, praised the leadership of crypto firms like Binance, Crypto.com, and Ripple, saying they are ‘fully committed to building a secure and sustainable innovation solving real problems.’

Meanwhile, the stringent regulatory demands of the authorities have pushed several crypto firms out of the country. Singapore has licensed only 14 companies to operate out of almost 200 applications.