The Monetary Authority of Singapore (MAS) will reportedly insist that cryptocurrency firms keep clients’ assets in a designated trust by the end of 2023.
The step comes several months after the infamous meltdown of FTX, which triggered colossal investor losses. Numerous individuals and entities have blamed the exchange for comingling user funds and scamming customers.
The New Requirements
As reported by Bloomberg, the Singaporean regulator will enforce the obligation to grant maximum customer protection.
Apart from storing users’ assets in a trust, crypto organizations might be banned from providing lending and staking services to retail investors. It is worth noting that Thailand’s Securities and Exchange Commission (SEC) has also taken a similar measure.
The MAS started contemplating those rules in October 2022, a month before the collapse of FTX, which shocked the entire industry.
Singapore has recently emerged as a flourishing crypto region, whilst its regulatory framework has attracted multiple firms. The cryptocurrency exchange Gemini announced last month that it will increase its workforce in the city-state by over 100 members.
For his part, Stuart Alderoty – Chief Legal Officer at Ripple – highlighted Singapore’s approach towards the sector, saying it has established a “workable framework that truly unites consumer protection, market integrity, and innovation.”
His comments came shortly after Ripple obtained an in-principle payments license from the MAS. Recall that the enterprise blockchain provider has a long-going spat with the SEC in the United States.
Crypto Adoption in Singapore Spikes
Providing additional security to Singaporean crypto participants sounds reasonable, considering the rising number of locals that have recently joined the ecosystem.
Independent Reserve estimated in one of its surveys that 43% of Singapore’s residents hold some amount of digital assets (a level unseen since the 2021 bull market).
54% have hopped on the bandwagon to diversify their portfolios, whereas half of the investors who purchased cryptocurrencies in the last year did so following advice from family members, friends, or influenced by social media. Bitcoin is the most popular digital asset in Singapore, with 87% aware of it. Ethereum is second with 51%.
“The rising popularity of altcoins shows that more Singaporeans are beginning to gain more awareness about other cryptocurrencies apart from Bitcoin.
This is a promising sign for the industry as more investors gain exposure to various types of blockchains and projects that have innovative utility and potential to be adopted more widely for real-world applications and use cases,” Lasanka Perera – CEO of Independent Reserve Singapore – said.
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