Thailand and Singapore have announced new rules to ban crypto exchanges from offering lending and staking services to retail investors.
Thailand and Singapore have joined forces to crack down on crypto staking activities for retail investors. The regulators of both Southeast Asian nations have issued new rules to ban crypto exchanges from offering lending and staking services, citing investor protection concerns.
On Monday, the Thai Securities and Exchange Commission (SEC) announced new rules for digital asset service providers to improve investor protection.
According to the Thai SEC, crypto exchanges are forbidden to advertise or persuade the general public to support deposit staking and lending services.
The regulator explained that the ban applies to “depository services that offer returns to depositors and lenders,” meaning exchanges are outright banned from offering such services. The SEC’s new rules will take effect on July 31, 2023.
Under the new rules, the SEC also introduced a mandatory trading risk disclaimer, which exchanges must make clearly visible to customers. The risk disclaimer reads:
Cryptocurrencies are high-risk. Please study and understand the risks of cryptocurrencies thoroughly because you may lose your entire investment.
Furthermore, the Thai SEC requires exchange operators to ensure users acknowledge trading risks before consenting to use such services.
Finally, the SEC introduced investor suitability assessments to determine how much users may invest in crypto.
The Thai SEC’s ban follows an announcement from Singapore’s Monetary Authority (MAS) which also seeks to ban such services for retail investors.
The regulator said in a statement on Monday that it determined staking activities are unsuitable for the retail public given the “extremely high risk and speculative nature” of those activities.
The MAS said:
Regulations alone cannot protect consumers from all losses, given the extremely high risk and speculative nature of digital payment token trading.
In addition to the ban, the MAS will require crypto exchanges to safeguard customer assets in a trust before the end of the year.
This will mitigate the risk of loss or misuse of customers’ assets and facilitate the recovery of customers’ assets in the event of a crypto exchange’s insolvency.
