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Singapore Tightens Crypto Regulation

The Monetary Authority of Singapore (MAS) introduces new investor protection measures for crypto service providers to discourage cryptocurrency speculation among retail customers.

Singapore Tightens Crypto Regulation

The Monetary Authority of Singapore (MAS) has announced enhanced regulatory measures for digital payment token (DPT) service providers.

After final consultations, the regulator decided to strengthen business conduct and consumer access policies for crypto providers as well as introduce the minimum technology and cyber risk management requirements.

Shortly, the MAS will issue guidance for DPT service providers on how to:

  • Identify, mitigate and clearly disclose potential and actual conflicts of interest;
  • Publish policies, procedures and criteria that govern the listing of a DPT; and
  • Establish effective policies and procedures to handle customer complaints and resolve disputes.

Among the new requirements, there are obligations for DPT service providers to determine whether a customer is aware of crypto trading risks before providing access to digital asset services, eliminate any incentives encouraging crypto trading (like promotions, giveaways, etc.), and establish trading limits based on a customer’s net worth.

In addition, DPT providers will be barred from accepting payments from locally-issued credit cards as well as conducting financing, margin and leverage transactions.

As for the applicable cyber risk measures they would be similar to those imposed on traditional financial institutions.

Before the final updates, MAS published the first tranche of consultation responses and legislative amendments regarding customer asset segregation and custody requirements in July 2023.

The regulator intends to require cryptocurrency exchanges to implement the practice of storing client assets in trust management as part of their activities.

MAS consultations on limiting the possibilities of crypto lending to retail investors started in October last year. However, the FTX crash, which shocked the crypto market in late 2022, accelerated the regulatory efforts to tighten the regulation of digital assets in Singapore.

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.