Singapore plans more rules to curb retail crypto speculation

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SINGAPORE (Bloomberg): Singapore proposed additional regulations that further harden its stance against retail speculation in cryptocurrencies, including barring individual investors from borrowing to trade.

Digital payment token service providers won’t be allowed to offer any incentives for retail trading in cryptocurrencies or provide financing, margin or leverage transactions, the Monetary Authority of Singapore said in a statement on Thursday. They also won’t be able to accept locally issued credit card payments, the MAS said.

The central bank also expanded the retail rules to encompass all investors "regardless of residency.” Before, its retail curbs only covered investors based in the city-state. It also made clear that incentives like referrals, learn-and-earn programs and similar promotions will be covered by the restrictions.

The expanded measures will be gradually phased in from mid-2024.

Singapore, one of Asia’s main crypto hubs, has been distancing itself from speculation in digital assets after being hit by a series of high-profile crypto blowups like the collapse of hedge fund Three Arrows Capital. Earlier measures to restrict retail participation include plans to ban lending and staking.

Still, even the proposed measures "cannot insulate customers from losses associated with the inherently speculative and highly risky nature of cryptocurrency trading,” Ho Hern Shin, MAS’ deputy managing director for financial supervision, said in a statement. People should not deal with unregulated entities, including those based overseas, Ho said.

The final guidelines were released after the MAS received feedback on its proposals on so-called digital payment token services that came out in October last year.

Other requirements set to be imposed include maintaining high availability and recoverability of critical systems, much like how banks must do. Crypto firms should also have processes in place to handle customer complaints and resolve disputes, the MAS said.

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