Singapore MAS Imposes Trust Requirement on Crypto Exchanges

Singapore MAS Crypto
Summary: The MAS demands compliance by the end of 2023, aiming to protect cryptocurrency holdings from catastrophic events like the FTX explosion. The guidelines require firms to monitor client asset settlements daily and maintain accurate records, while ensuring the independence of custody operations.

Since the world’s leading financial regulators are still working to establish guidelines for the digital asset business, trading conditions have become more volatile. The Monetary Authority of Singapore (MAS) is looking to impose a trust requirement on cryptocurrency exchanges as a means of protecting investors’ assets.

Move Funds Into Trust by Year End

The Monetary Authority of Singapore (MAS) reportedly demanded that crypto exchanges in the nation move client money into trust on Monday. The cryptocurrency exchanges must comply with the rules and move their funds by the end of year 2023. This action is intended to safeguard cryptocurrency holdings from catastrophic events such as the FTX explosion.

Lending and Staking Program

Moreover, a move to prohibit lending and staking programs for retail investors is going forward in Singapore. However, in October of last year, the Monetary Authority of Singapore began deliberating the topic and ultimately concluded that more regulation of crypto-asset connected businesses was necessary.

Safeguarding Customers Funds

When the market has a high risk and speculative character, the MAS has said that regulations cannot always safeguard investors from losses. Furthermore, it emphasized that traders should be cautious. It’s worth noting that this change occurs at a time when nations like Hong Kong are actively seeking to increase their international influence.

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The digital payment token (DPT) service providers have broad backing, according to the financial regulator, which is good news for the security of customer cash. Firms are required by the proposed guidelines to monitor the settlement of their clients’ assets on a daily basis and keep accurate records. However, the registered cryptocurrency exchanges must also guarantee the independence of the custody operation from all other parts of the firm.

Ravi Kumar