Home » Singapore may soon require retail investors to take test before trading crypto, prohibit credit cards • TechCrunch

Singapore may soon require retail investors to take test before trading crypto, prohibit credit cards • TechCrunch

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Singapore may soon require retail investors not to use credit card payments or other forms of borrowing to trade cryptocurrencies, the central bank announced on Wednesday in a series of strict measures. I suggested. unstable assets.

In a series of consultation papers, the Monetary Authority of Singapore said it was concerned that many retail customers may be “not sufficiently knowledgeable about the risks of trading” in digital payment tokens. Willing or able to endure.

The central bank also proposed that cryptocurrency firms licensed under the country’s payment services law should not be allowed to lend to retail investors in a move that would overthrow the operations of many firms.

“This latter option is more stringent than the regulatory treatment of retail customers’ securities under SFA38,” the central bank acknowledged, adding, “MAS will not be able to afford the increased risk of consumer harm in this unregulated space. , we believe that stricter measures against retail customers may be necessary.”

Some popular cryptocurrency exchanges require customers to complete surveys on a regular basis before they are allowed to participate in trading cryptocurrencies or derivatives.Central Bank Admitted [PDF] Many industry insiders support some form of assessment of retail customer risk knowledge, but say that whenever there is a financial interest in tokens offered to customers, they should be disclosed.

The new guidelines, which are open for public consultation until December 21, also suggest that crypto service providers should not use incentives such as offering free tokens or other gifts to retail customers. He also suggested banning celebrity endorsements.

stablecoin

The central bank also requires that stablecoin issuers make appropriate disclosures about their tokens and set reserves in cash, cash equivalents, or debt securities representing at least 100% of the face value of the tokens “in circulation.” suggested to keep. times.

According to the proposal, debt securities should be issued by fixed currency central banks or by governments and organizations of international character with a credit rating of at least AA-.

“SCS [single-currency pegged stablecoins] Issuers are required to obtain independent certification, such as by an external auditing firm, that their reserve assets meet the above requirements each month. This certificate contains the percentage of reserve assets in excess of the face value of his SCS that are outstanding and in circulation, is published on his website by the issuer, and by the end of the following month he will file with the MAS. (for the month in which the certificate was issued).suggestion To tell [PDF]It adds that issuers must appoint an external auditor to conduct an annual audit of their reserve assets and submit a report to the MAS.

The proposal marks a major shift in Singapore’s stance on crypto. Once favored as a global crypto hub for its policies, Singapore authorities have strengthened their views on digital assets following a string of corporate collapses, including: Terraform Labs Stablecoin UST and native token LUNA, and Hedge Fund Three Arrows Capital.

The central bank said, “The collapse of many cryptocurrency trading platforms, where a minority had engaged in staking and lending activities, has caused significant damage to consumers.”

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