Singapore may consider new rules and regulations to protect consumers amid the cryptocurrency market crash and sell-off, which resulted in a string of dramatic events involving high-profile crypto blowups.
According to a senior government minister, the Monetary Authority of Singapore (MAS) is looking at adding more restrictions on how the general public can use cryptocurrencies.
The central bank could “impose limits on retail participation” and impose rules on the use of leverage in cryptocurrency transactions, according to Tharaman Shanmugaratnam, minister in charge of MAS, who commented in parliament on Monday.
Member of Parliament Murali Pillai had questioned Shanmugaratnam whether MAS planned to impose additional limits on the cryptocurrency trading platform.
“Since 2017, MAS has consistently warned that cryptocurrencies are not a suitable investment for the retail public,” Shanmugaratnam said. “Most cryptocurrencies are subject to sharp speculative price swings. Recent events have clearly demonstrated the risks, with the prices of many cryptocurrencies falling sharply.”
As the $2 trillion market sell-off to a wide range of players, the central bank has reiterated this year that cryptocurrencies are not for individual investors.
Both TerraForm Labs, whose TeraUSD stablecoin was snapped in May, and Three Arrows Capital, the cryptocurrency hedge fund that was forced into liquidation last month after failing to pay creditors, are headquartered in Singapore.
Withdrawals have increased
The increase in withdrawals crippled liquidity, so Singapore-based cryptocurrency lender Wald said on Monday that it has halted withdrawals and has contacted advisors to investigate a possible restructuring.
According to a blog post published on Monday, the company is looking at possible restructuring possibilities to deal with the problems it is facing.
CEO Darshan Bathija noted that the business has experienced significant customer withdrawals totaling $198 million since June 12.
The collapse of TeraUSD, Celsius’ withdrawal freeze, and Three Arrows Capital’s loan default, as well as financial difficulties from trading partners, have made things difficult for Wald, he said.