Singapore to mandate crypto exchanges store client funds in a trust
Singaporean authorities have drafted plans to make it mandatory for crypto exchanges to store their customers’ funds in a trust. The legislation will take effect before the end of the year.
MAS ups its investor protection push
As part of plans to foster consumer protection within its digital assets space, the Monetary Authority of Singapore (MAS) has stated that crypto exchanges and other market participants in the region must separate users’ funds from their operating capital.
According to sources, Singapore-based crypto projects must store their customers’ funds in a trust before the end of 2023. The regulator has been exploring several consumer protection measures since the scandalous collapse of Sam Bankman-Fried’s FTX last year.
Similarly, the MAS will officially ban crypto lending and staking activities for retail investors.
Despite granting regulatory approval to a slew of bitcoin (BTC)-linked businesses in recent months, the regulators have stated categorically that implementing amenable regulatory frameworks alone may not be the perfect way to protect consumers from the inherent risks in digital asset trading.
As such, the agency has urged consumers to exercise utmost caution when interacting with these super-volatile digital assets. If successfully implemented, the proposed measures will strengthen Singapore’s crypto space and curb funds comingling practices by market participants to a large extent.
