Singapore May Impose More Limitations on Cryptocurrencies

Singapore May Impose More Limitations on Cryptocurrencies
Singapore is looking at new rules for trading cryptocurrencies, which it says are necessary to safeguard the general public.
Photo : ROSLAN RAHMAN / Getty Images

Singapore is proposing new rules for cryptocurrency trading, prohibiting individual bitcoin investors and limiting leverage to protect the public.

Vauld, a Singapore-based cryptocurrency exchange, decided to immediately stop all deposits, trading, and withdrawals from its platform.

Singapore Wants to Regulate Crypto Trading to Safeguard the Public

Singapore is considering new regulations for cryptocurrency trading that it claims are required to protect the general public. Restrictions on retail trading and leverage in bitcoin transactions are two examples of this.

The information was revealed weeks after the government issued many cautions that cryptocurrency investments were not suited for the general public because of their "sharp speculative price fluctuations."

Tharman Shanmugaratnam, a senior minister in Singapore and the head of the Monetary Authority of Singapore, reportedly stated that the financial watchdog might consider "putting limits on retail participation" for cryptocurrency investors and introducing regulations on the use of leverage for crypto transactions. Given the international character of bitcoin markets, Shanmugaratnam has advocated for regulatory clarity among financial authorities.

The minister also said that the country's Payment Services Act gives MAS the authority to put additional regulations in place to improve consumer protection, uphold financial stability, and defend the efficacy of its monetary policies.

However, Singapore had emphasized the need to promote the development of the underlying technologies frequently connected with cryptocurrencies, namely blockchain.

Heng Swee Keat, the Coordinating Minister for Economic Policies and Deputy Prime Minister, stated last month that measures were required to maximize the benefits of new technology while minimizing the hazards.

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In May, MAS made plans to test asset tokenization use cases and determine if autonomous trading using blockchain technology is feasible. Here, efforts would focus on creating interoperable networks to speed up the trade of digital assets and assessing the rules required to protect against any hazards.

Research published in August of last year found that 67 percent of Singapore's investors owned cryptocurrencies, with 78 percent owning Ethereum and 69 percent owning Bitcoin.

According to KPMG, investments in Singapore's fintech industry increased by 47% year over year to $3.94 billion last year, with $1.48 billion across 82 acquisitions going to blockchain and cryptocurrencies.

Singaporean Cryptocurrency Exchange Suspends Withdrawals

The challenging decision to immediately halt all withdrawals, trading, and deposits on the Vauld platform has been made by Singapore-based cryptocurrency exchange Vauld.

The business plans to petition the Singapore courts for a moratorium as Vauld users have attempted to withdraw more than $197.7 million since June 12, 2022, in what seems to be a run on the crypto bank.

The decision to halt withdrawals is an abrupt about-face. According to reports, Vauld touted $1 billion in assets under management in May this year, and a corporate email from June 16 said everything would carry on as usual. After only 18 days, the business looks at "possible restructuring possibilities."

Vauld's CEO Darshan Bathija tweeted on June 21 that the business has reduced its personnel by 30%, which was the first indication that it was being pressured. Separately, Bathija emphasized that Three Arrows Capital (3AC) had invested in the business early but had pulled out by the end of 2021.

According to the statement from Vauld, their decision to freeze clients' money was motivated by the unstable market environment, its primary business partners' financial issues, which had an impact on them, and the present status of the market.

Related Article: Meitu Warns Investor After a Collapse of Ether and Bitcoin Value

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