Singapore Plans to Safeguard Cryptocurrency Investments with New Trust Requirement
Singapore has announced plans to impose a trust requirement on cryptocurrency exchanges in a bid to instill confidence in the market and protect investors from potential losses.
On Monday, the Monetary Authority of Singapore (MAS) stated that cryptocurrency exchanges will be required to keep customer assets in a trust, according to a report from Bloomberg.
The new regulation is expected to be implemented before the end of the year.
Additionally, Singapore will proceed with its proposal to ban lending and staking for retail investors.
The MAS initiated a consultation on these measures in October last year, just before the FTX debacle. The aim of the consultation was to enhance Singapore's regulatory framework for digital assets.
The MAS emphasized that although regulations play a crucial role in safeguarding consumers, traders must exercise caution due to the high risk and speculative nature of digital payment token trading.
“Regulations alone cannot protect consumers from all losses, given the extremely high risk and speculative nature of digital payment token trading,” the MAS said in the statement, adding consumers must continue to exercise “utmost caution” when trading.
In finance, trust refers to a legal arrangement where one party, known as the trustor or settlor, transfers the ownership of assets to another party, called the trustee.
The trustee then manages the assets on behalf of a third party, the beneficiary. Trusts are commonly used for estate planning and asset protection purposes.
There are several benefits to setting up a trust. For one, trusts are effective tools for protecting assets from creditors and legal claims.
By transferring ownership of assets to a trust, they are no longer considered part of an
Read more on cryptonews.com
