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A Balance Between Regulation and Attraction

Singapore Central Bank Tightens Crypto Rules, Simplifies Investment Criteria

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208 Listen to this article The Monetary Authority of Singapore (MAS) has unveiled its finalized regulations for crypto service providers […]

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The Monetary Authority of Singapore (MAS) has unveiled its finalized regulations for crypto service providers after considering industry feedback. These rules are designed to strike a balance between regulating the cryptocurrency sector and attracting crypto businesses to Singapore.

MAS is keen on discouraging cryptocurrency speculation among retail customers. To achieve this, crypto entities will be prohibited from offering financing, margin transactions, or incentives for trading. They must also refuse locally issued credit card payments and assess a customer’s risk awareness before granting access to their services.

This announcement follows an earlier set of regulations that required crypto service providers to deposit customer assets under a statutory trust for safekeeping by the end of the year.

MAS has maintained its stance against speculative retail trading but has incorporated some industry feedback into its final rules. For instance, they have relaxed the criteria for becoming an accredited investor, allowing certain crypto assets to contribute to the required S$2 million ($1.5 million) net worth.

Additionally, MAS permits crypto exchanges to establish their criteria for listing tokens, as long as they disclose conflicts of interest, publish their listing criteria, and establish dispute resolution procedures. This approach differs from Hong Kong’s more prescriptive criteria for token listings.

The regulations also include reporting requirements for high availability and risk incidents, aligning with standards for systemically important financial institutions but extending them to crypto service providers, distinguishing them from payment service providers.

These rules will be implemented in phases, starting from mid-2024, to allow a sufficient transitional period for compliance.

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MAS emphasized that the primary goal of these regulations is to limit potential harm to consumers. However, they also acknowledge that the speculative and risky nature of cryptocurrency trading can still expose customers to losses.

FAQ’s

Are cryptocurrencies regulated in Singapore?

Yes, cryptocurrencies are regulated under the PSA, requiring DPT service providers to be licensed or exempted​​.

What is the role of MAS?

MAS is the central bank and financial regulator in Singapore, responsible for issuing regulations and supervising financial institutions​​.

Is a license required for cryptocurrency trading platforms in Singapore?

Licensing depends on the functionality of the platform. Platforms facilitating trading may require a license​​.

What are the new crypto laws in Singapore?

While there are no recent laws, MAS has been amending the PSA and issuing consultation documents and investor protection measures​​.

How do these regulations compare globally?

Singapore’s approach is more flexible compared to Hong Kong’s more prescriptive measures, demonstrating a willingness to adapt and respond to industry feedback while maintaining robust consumer protection and risk mitigation standards​

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