Singapore expands crypto regulations, introduces enhanced user protection requirements

Singapore is introducing regulations that appear to be stricter for companies offering cryptocurrency services or digital payment token (DPT) services.

The Monetary Authority of Singapore announcement On Tuesday, it expands the scope of regulated payment services by introducing amendments to the Payment Services Act and its subsidiary legislation.

The changes are expected to come into effect in stages starting April 4, according to the statement. Specifically, the MAS noted that the new rules would cover custodial services of DPTs, facilitation of transmission of DPTs and facilitation of cross-border money transfers between countries “even where funds are not accepted or received in Singapore “.

“The amendments will allow the MAS to impose requirements relating to anti-money laundering and counter-terrorism financing, user protection and financial stability on DPT service providers,” MAS said.

The MAS added that it would provide “transitional arrangements” for those carrying out activities under the expanded regulatory scope, but that they must notify the regulator within 30 days and submit a license application within six months from April 4.

“This expansion has been in the works since 2021 and brings much-awaited regulatory clarity to crypto custody players in Singapore,” Angela Ang, former MAS regulator and senior policy advisor at blockchain intelligence firm TRM Labs, told The Block.

“I don’t think any of the changes are unexpected or surprising, so to the extent that these changes may lead to the exit of some crypto exchanges or companies from Singapore, this decision probably would have been made some time ago” , said Kelvin Low, a lawyer. professor at the National University of Singapore.

Lily Z. King, chief operating officer of cryptocurrency holding and custody company Cobo, said the MAS announcement comes at a crucial time, “especially given the recent call for legislation regarding the custody of cryptocurrencies in Hong Kong by legislative council member Duncan Chiu earlier this week. “

Consumer protection

In a guideline Published on Tuesday, the MAS clarified the conditions for consumer protection measures that DPT service providers should take under the Payment Services Act.

Measures include segregating client assets, maintaining appropriate books and records, and ensuring the integrity and security of client assets. The directive is expected to come into force on October 4.

(Updates: added comments from Ang, Low and King)

Disclaimer: The Block is an independent media outlet providing news, research and data. Since November 2023, Foresight Ventures has been a majority investor in The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to provide objective, impactful and current information about the crypto industry. Here is our current financial information.

© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.