Singapore Asks Crypto Firms to Keep Client Funds in a Trust
- Crypto firms operating in Singapore have been asked to keep clients’ funds in a trust.
- The customer assets need to be transferred before the end of the year, as per the MAS.
- Crypto enthusiasts must continue to exercise “utmost caution” while trading digital assets, said the MAS.
- The city-state will be moving ahead with a proposal to ban lending and staking for retail investors.
Crypto firms in Singapore, one of the emerging crypto markets, have been asked to keep the assets belonging to their clients in a trust. This statement comes at a time when bankruptcies and withdrawal pauses initiated by startups in the blockchain space are at an all-time high. Regulators around the world have been trying to impose policies for the benefit of crypto investors.
As per a report from Bloomberg dated July 3, all the crypto firms in Singapore that are in charge of their clients’ funds will be required to keep these assets in a trust before the end of the year, which would ensure the safety of the funds. It seems that the regulators have doubts regarding the safety of crypto operations following the collapse of bankrupt crypto exchange FTX in November 2022.
“Regulations alone cannot protect consumers from all losses, given the extremely high risk and speculative nature of digital payment token trading,” said the Monetary Authority of Singapore in the statement, adding consumers must continue to exercise “utmost caution” while trading digital assets.
Moreover, according to the report, the city-state with the third-highest population density will be moving ahead with a proposal to ban lending and staking for retail investors in Singapore. This would mean that all activities related to cryptocurrency lending might be banned. Staking and lending services are some of the most profitable services that are provided by crypto exchanges like Binance and Coinbase.
Recently, Coinbase was sued by the United States Securities and Exchange Commission (SEC) for providing staking services to US citizens without registering its services as a security with the regulator. The regulator also outlined some of the major cryptocurrencies that it believed were securities, including Solana (SOL), Cardano (ADA), and others.
On the other hand, as reported earlier by BitcoinWisdom, American fintech firm Ripple secured in-principle approval from the Monetary Authority of Singapore and revealed its plans to expand in the Asia Pacific region. Furthermore, in early June, stablecoin issuer Circle became the second firm to receive the MPI license in the city-state after receiving in-principle approval from the MAS in November last year.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
