Singapore’s financial regulator will impose new rules on cryptocurrency service providers to protect retail investors from speculation.
The Monetary Authority of Singapore (MAS) has developed measures for Digital Payment Token (DPT) service providers that will discourage speculation related to crypto investments.
Five key restrictions for DPT service providers are formulated, namely:
- The need to determine the customer’s risk awareness of crypto services.
- Prohibition on incentives to trade in cryptocurrencies.
- Prohibition on financing, margin, or leveraged transactions.
- Prohibition on accepting local credit card payments.
- Limiting the value of cryptocurrencies in determining customer equity.
Additionally, crypto service providers need to:
- Identify, mitigate, and clearly disclose potential and actual conflicts of interest.
- Establish and publish policies, procedures, and criteria governing the listing of digital assets.
- Set up effective policies and procedures for handling customer complaints and resolving disputes.
The practical implementation of the described measures will be done gradually starting in mid-2024.
Ho Hern Shin, Deputy Managing Director (Financial Supervision) of the MAS, clarified in a press release that the described measures can’t completely protect customers from losses associated with the speculative and high-risk nature of cryptocurrency trading but will help in the pursuit of this goal.
Previously, the MAS specialists proposed common standards for the use of different digital asset classes. In addition, Singapore’s regulator joined forces with colleagues from Japan, Switzerland, and the United Kingdom to form a special regulatory group under Project Guardian.
