Singapore suggests cryptor rules to strengthen consumer protection

According to a number of top-class crypto failures in connection with the city-state,

Singapore have reinforced the warnings to small investors from the "dangers" of speculation with cryptocurrencies and outlined suggestions for the protection of consumers.

In two consultation papers published on Wednesday, the Monetary Authority of Singapore suggested that they prevent small investors from lending money or using credit cards to buy cryptocurrencies and to give their digital tokens in search of returns. It also wants crypto exchanges to test potential crypto buyers to check whether they understand the risks in a so-called "highly volatile" asset class.

Singapore generally created an inviting environment for the crypto industry. Exchange Binance once referred to it as "cryptoparadies" and several prominent companies have settled there. But the supervisory authorities have raised the alarm after a number of top-class crypto implosions and suggest restrictions for some of the most popular speculative instruments.

"MAS urgently advises consumers from speculation in cryptocurrencies," it said. "Several cases of misconduct were reported by international media, including cases in which legal proceedings were initiated against companies that did not have sufficient solid business practices," she added.

This year the crypto hedge fund Three Arrows Capital based in Singapore collapsed and took the Voyager stock exchange with it. An international search with a focus on the city state is also ongoing to track down the co -founder of Terraform Labs, do Kwon, whose Stablecoin terraUSD imploded in May.

The MAS stopped a ban on a completely crypto ban and explains that it greets the "transformative economic potential" of the investment class. However, trading platforms must ensure that private customers are fully aware of the risks and have the financial means to cope with major losses, it said. "Support for a digital asset ecosystem does not mean support for cryptocurrency speculations," it said.

The MAS also said that so-called stablecoins, which are intended to reproduce the value of real assets such as the dollar in a symbolic form, must be properly secured with the Singapore dollar or other important currencies.

nizam Ismail, founder of the Ethicom Consultancy, based in Singapore, said the Financial Times that some suggestions could be "excessively prescriptive and contradicting Singapore's regulatory philosophy".

"The ban on buying [tokens] by credit card or loan could unknowingly encourage to act with crypto derivatives that are largely unregulated," added Ismail.

more far -reaching proposals include the obligation of service providers to ensure that the assets of customers are separated from their own assets, and the introduction of "good industry practices" against unfair trade, including the monitoring of trade activities and the determination of rules for trade.

"Markets for digital payment stands were susceptible to unfair trade practices of market manipulation, misleading behavior and insider trade by shameful actors," said the MAS.

Singapore will probably encounter the same problems as other jurisdiction in the monitoring and control of the trade of its citizens on platforms that are located abroad or operate outside of regulatory supervision. "The problem of non -regulated companies that work in Singapore in this area is not taken into account," said Kelvin Low, legal professor at the National University of Singapore.

The regulatory authority's proposals can be consulted publicly by December 21.