SINGAPORE — Singapore is considering more safeguards to protect consumers after plummeting cryptocurrency prices triggered the insolvency of a range of major players, including companies based here.
Chief Minister and Coordinating Minister for Social Policy, Tharman Shanmugaratnam, said on Monday July 4 that the Monetary Authority of Singapore (MAS) had “carefully considered” having additional consumer protection rules, including limiting retailer participation and imposing rules on the use of leverage, or borrowed capital, in cryptocurrency transactions.
“Given the borderless nature of cryptocurrency markets, regulatory coordination and cooperation is needed globally. These issues are being discussed in various international standards bodies in which MAS actively participates,” said he said in a written answer to a parliamentary question. whether the regulator would put in place more safeguards.
Mr. Tharman, who is also the chairman of MAS, pointed out that cryptocurrencies are very risky and not suitable for retail investors, as most digital currencies are subject to large speculative price swings.
To that end, the MAS in January this year went further than most other regulators to restrict the marketing and advertising of cryptocurrency services in public spaces and to prohibit cryptocurrency trading from being featured in public spaces. in a way that trivializes its risks, he said.
Since then, these digital payment token service providers have removed cryptocurrency ATMs from public spaces and removed advertisements from places of public transportation.
The crypto market has been battered in recent months, with the price of the world’s most traded digital currency, Bitcoin, having fallen 70% since November to currently hover at US$20,000, while the total market capitalization has plunged nearly two-thirds to minus US$1 trillion (S$1.4 trillion).
The sale came following the collapse of Singapore-based Terraform Labs stablecoin TerraUSD and sister token Luna.
Global economic concerns, soaring inflation, and rising interest rates have also heightened investor jitters, leading to the crypto rout.
Falling prices have challenged some of the biggest names in the industry, including Singaporean hedge fund Three Arrows Capital and Babel Finance, as well as stock exchanges Celsius Network and BlockFi.
The latest to be added to the list is Singapore-based crypto lender Vauld, which announced on Monday that it will suspend withdrawals, trades and deposits.
“This is due to a combination of circumstances such as volatile market conditions, the financial difficulties of our major trading partners which inevitably affect us, and the current market climate, which has led to a significant amount of customer withdrawals exceeding 197 US$.7 million since June 12, 2022,” the firm said.