Singapore’s Central Bank, or the Monetary Authority of Singapore (MAS), announced today that crypto service providers in Singapore must keep their customer assets in a legal trust before the end of the year. This requirement comes after MAS’s public consultation to enhance customer protection, which started in October 2022.
A Ban Imposed on Lending and Staking Crypto for Individual Investors
MAS stated regarding the trust requirement, “This will reduce the risk of customers’ assets being lost or misused, and will facilitate the recovery of customers’ assets in the event of a bankruptcy of a DPT (Digital Payment Token or Crypto Currency) service provider.”
MAS also prohibits crypto service providers from facilitating the lending and staking of individual customers’ tokens. However, no ban has been imposed on providing these two services for institutional and accredited investors.
The Singapore Central Bank also requested public feedback on legislative changes focusing on the implementation of the latest requirements.
Angela Ang, Senior Policy Advisor at Blockchain security company TRM Labs and former MAS regulator, said, “These latest restrictions on individual access to crypto should not be a surprise to anyone following the Singapore market. The decision by MAS to require an independent custodian for customer assets, such as withdrawing specific proposals, shows that it listens to the industry and is sensitive to practical matters such as the scarcity of third-party custodians.”
Singapore’s “Ruthless” and “Brutally Tough” Goal
Singapore’s commitment to support the sector’s technologies to improve its existing traditional financial systems is paralleled by the goal of being ruthless and brutally tough against bad actors and ventures in the crypto industry.
Last month, MAS had suggested ways to design open, interoperable networks and standards for the use of digital money for tokenized digital assets, signaling steps towards this area.
