Singapore’s crypto asset (virtual currency) service providers will be required to place customer assets in statutory trusts for safekeeping by the end of the year, the Monetary Authority of Singapore (MAS) announced on July 3.
The requirement will be introduced after MAS received a public consultation on increased customer protection, which began in October 2022.
“This will reduce the risk of loss or misuse of customer assets and facilitate the recovery of customer assets in the event of a DPT (digital payment token or crypto asset) service provider going bankrupt,” MAS said.
The MAS also restricted crypto service providers from facilitating token lending and staking by retail customers, but could continue to serve institutional and accredited investors.
Singapore’s central bank is soliciting public input on legislative changes focused on implementing the latest requirements.
“This increase in retail access to crypto assets comes as no surprise to those familiar with the Singapore market,” said Angela Ang, senior policy adviser at blockchain analytics firm TRM Labs and former MAS. said. She said, “MAS’s decision to withhold certain proposals, such as requiring independent custodians for client assets, reflects the industry’s willingness to listen to realistic It shows that they are sensitive to various considerations.”
Ang also told CoinDesk in an email that Singapore’s requirements are the same as for other payment service providers and not as stringent as those in Hong Kong. Singapore currently requires 90% of customers’ crypto assets to be held in crypto wallets, unlike Hong Kong’s requirement of 98%, but unlike Hong Kong, cold wallets do not need to be onshore. do not have.
MAS indicated that it may change its position in the future on banning cryptocurrency entities from facilitating token lending and staking for individual customers.
“Some respondents suggested allowing DPT service providers to offer such activities under the consent and risk disclosure of individual customers, while prohibiting such high-risk and speculative activities. Some respondents argued,” MAS said. “MAS will monitor market developments and consumer risk perceptions and take steps to ensure that our actions are balanced and appropriate.”
Singapore’s commitment to technical assistance to the industry to improve its existing traditional financial system reflects Singapore’s stated aim to deal “brutally, mercilessly and harshly” against the cryptocurrency industry’s misdeeds. closely related to Last month, MAS also proposed how to design an open and interoperable network for tokenized crypto assets and standards for the use of digital money.
｜Translation: CoinDesk JAPAN
｜Editing: Toshihiko Inoue
｜Original: Singapore’s MAS Orders Crypto Firms to Keep Customer Assets in a Trust by Year-End