Singapore Plans To Ban Crypto Staking And Lending To Protect Clients’ Funds
Key Points:
- The Monetary Authority of Singapore will require cryptocurrency platforms to store client assets in trust by the end of the year.
- Proposed guidelines include daily reconciliation of customer assets, operational separation of custody function from other business divisions, and explicit disclosures on risks for customers.
- MAS also plans to prohibit cryptocurrency service providers from facilitating lending or staking for retail clients, considering these activities inappropriate for the general public.
According to Bloomberg, the Monetary Authority of Singapore (MAS) will compel cryptocurrency platforms to store client assets in trusts by the end of the year, as well as go through with a plan to prohibit individual investors from lending and staking.
The MAS said on Monday that there is widespread support for digital payment token (DPT) service providers to protect clients’ funds.
That is part of the endeavor to secure cash after the downfall of FTX in November. In October of last year, right before FTX collapsed, MAS launched a consultation on such proposals. The organization also stated that customers should continue to trade with extreme care.
Firms would be required to undertake daily reconciliation of customers’ assets, keep correct records, and maintain access and operational controls to customers’ DPTs in Singapore under the proposed guidelines.
“Regulations alone cannot protect consumers from all losses, given the extremely high risk and speculative nature of digital payment token trading,” the MAS stated.
They must also guarantee that the custody function is operationally separate from other business divisions. In finance, a custodian is a specialized business that retains the assets of clients for safekeeping.
Customers will be required to receive explicit disclosures from licensed crypto firms on the dangers associated with having their funds kept by the service provider.
MAS also intends to prohibit DPT service providers from assisting the loan or staking of their retail clients’ tokens since these actions are often inappropriate for the general public. Staking is the mechanism through which cryptocurrency businesses lend digital tokens to other companies in the industry in order to earn enormous sums of money.
Singapore’s actions follow a consultation to strengthen its regulatory environment for digital assets. Nevertheless, other cities, such as Hong Kong, are attempting to encourage greater engagement in the industry from people and organizations. As Coincu reported, Hong Kong Legislative Council member Johnny Ng has stated his support for the Hong Kong crypto business and has asked Coinbase and other crypto exchanges to set up operations in the territory.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Harold
Coincu News
Author
News
Singapore Plans To Ban Crypto Staking And Lending To Protect Clients’ Funds
Key Points:
- The Monetary Authority of Singapore will require cryptocurrency platforms to store client assets in trust by the end of the year.
- Proposed guidelines include daily reconciliation of customer assets, operational separation of custody function from other business divisions, and explicit disclosures on risks for customers.
- MAS also plans to prohibit cryptocurrency service providers from facilitating lending or staking for retail clients, considering these activities inappropriate for the general public.
According to Bloomberg, the Monetary Authority of Singapore (MAS) will compel cryptocurrency platforms to store client assets in trusts by the end of the year, as well as go through with a plan to prohibit individual investors from lending and staking.
The MAS said on Monday that there is widespread support for digital payment token (DPT) service providers to protect clients’ funds.
That is part of the endeavor to secure cash after the downfall of FTX in November. In October of last year, right before FTX collapsed, MAS launched a consultation on such proposals. The organization also stated that customers should continue to trade with extreme care.
Firms would be required to undertake daily reconciliation of customers’ assets, keep correct records, and maintain access and operational controls to customers’ DPTs in Singapore under the proposed guidelines.
“Regulations alone cannot protect consumers from all losses, given the extremely high risk and speculative nature of digital payment token trading,” the MAS stated.
They must also guarantee that the custody function is operationally separate from other business divisions. In finance, a custodian is a specialized business that retains the assets of clients for safekeeping.
Customers will be required to receive explicit disclosures from licensed crypto firms on the dangers associated with having their funds kept by the service provider.
MAS also intends to prohibit DPT service providers from assisting the loan or staking of their retail clients’ tokens since these actions are often inappropriate for the general public. Staking is the mechanism through which cryptocurrency businesses lend digital tokens to other companies in the industry in order to earn enormous sums of money.
Singapore’s actions follow a consultation to strengthen its regulatory environment for digital assets. Nevertheless, other cities, such as Hong Kong, are attempting to encourage greater engagement in the industry from people and organizations. As Coincu reported, Hong Kong Legislative Council member Johnny Ng has stated his support for the Hong Kong crypto business and has asked Coinbase and other crypto exchanges to set up operations in the territory.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Harold
Coincu News
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