In a statement on Monday, Singapore’s central bank and financial regulator announced a new set of measures for crypto firms to ensure customer assets are protected.
The MAS would require all Digital Payment Token (DPT) service providers to place customer assets in a statutory 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 DPT service provider’s insolvency,” said MAS in a press release.
The regulator has also restricted these firms from providing lending and staking services to their retail customers but will allow them to continue the service for institutional investors.
In addition to keeping the funds segregated in a trust, these firms will also have to perform a daily reconciliation of customer assets in proper books and records and ensure that the custody arm of their business is operated independently.
The new measures follow a public consultation on regulatory measures that MAS began in October 2022, before the shocking implosion of the crypto exchange FTX. The regulator’s proposal to restrict retail customers from staking services was met with opposing views from the public, with some advocating for an outright ban on these activities.
Singapore appears to have changed its stance on the digital asset industry, which was once known for being one of the most crypto-friendly nations in the world. In an interview with the Financial Times, MAS’ Chief Fintech Officer Sopnendu Mohanty said that Singapore would be “brutal and unrelentingly hard” on bad behaviour in the crypto industry.
“We have been called out by many cryptocurrencies for not being friendly. My response has been: friendly for what? Friendly for a real economy or friendly for some unreal economy?” he said.