MAS Implements Comprehensive Crypto Regulatory Framework in Singapore

MAS Implements Comprehensive Crypto Regulatory Framework in Singapore

November 24, 2023

The Monetary Authority of Singapore (MAS) has recently concluded its response to the consultation paper on proposed regulations for cryptocurrency service providers, marking a significant step in establishing a regulatory framework for the crypto industry in Singapore.

According to a report by Amitoj Singh for CoinDesk, MAS has reiterated its stance on discouraging speculative cryptocurrency trading among retail customers. Crypto entities are now required not to offer financing, margin transactions, or any trading incentives. This measure aims to mitigate the risks associated with speculative trading in the volatile crypto market. Additionally, MAS has imposed a restriction on accepting payments via locally issued credit cards, further limiting easy access to speculative crypto trading for the general public.

An important aspect of the new regulations is the requirement for crypto service providers to assess a customer’s risk awareness before granting access to their services. This ensures that customers are adequately informed about the risks involved in cryptocurrency trading.

Singapore’s approach to crypto regulation is characterized by a desire to strike a balance between regulating the industry and attracting it to its shores. The latest announcement follows the first set of responses released in July, which required providers to deposit customer assets under a statutory trust for safekeeping.

Angela Ang, a senior policy adviser at blockchain intelligence firm TRM Labs and a former MAS regulator, noted MAS’s consistency against speculative retail trading. However, she acknowledged that MAS has adopted slightly less restrictive measures in certain areas, such as including cryptocurrencies in determining customers’ net worth.

In terms of accredited investor criteria, MAS has eased the requirements, allowing some crypto assets to be counted towards the S$2 million ($1.5 million) threshold. Additionally, MAS has given exchanges more autonomy in setting criteria for listing tokens, with the stipulation that they must disclose conflicts of interest, publish listing criteria, and establish procedures for resolving customer disputes.

The rules are set to take effect in phases starting from mid-2024, providing an adequate transitional period for implementation. Ho Hern Shin, deputy managing director for financial supervision at MAS, emphasized that while these measures aim to protect consumers, they cannot fully insulate them from losses due to the speculative and high-risk nature of cryptocurrency trading.

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