The Singapore authorities plan to limit the access of retail investors to trading cryptocurrencies. Monetary Authority of Singapore (MAS) managing director Ravi Menon explained that the regulator is concerned about the growing interest of citizens in cryptocurrency, writes Reuters.
“They seem to be irrationally oblivious to the risks involved in trading cryptocurrencies,” Menon said.
MAS is considering an option whereby investors would be required to pass due diligence before buying cryptocurrencies. Also, the authorities may impose restrictions on the use of leverage or borrowed funds when trading digital assets.
“Yes to digital asset innovation, no to cryptocurrency speculation,” Menon explained.
By October, the regulator will seek public feedback on its proposals.
Many crypto companies are losing money amid a declining market. Bitcoin is currently trading 70% below the all-time highs set in November last year.
In early August, Singapore-based crypto platform Hodlnaut suspended operations, after which it cut 80% of its staff. Hodlnaut Group ran into financial difficulties due to the losses of its Hong Kong subsidiary during the TerraUSD crash, the general decline in cryptocurrency prices, and unusually high volumes of withdrawals from the platform.
The regulator stressed that Korean organizations such as Terra are creating crypto companies and issuing digital assets abroad, which reduces the effectiveness of regulation and the safety of investors.