Singapore to require crypto firms to put user assets into trusts by year-end
Singapore’s central bank is introducing new measures to improve investor protection and market integrity in the cryptocurrency industry.
On July 3, the Monetary Authority of Singapore (MAS) announced new requirements for crypto service providers to hold customer assets into a statutory trust by year-end.
“This will mitigate the risk of loss or misuse of customers’ assets, and facilitate the recovery of customers’ assets in the event of a DPT service provider’s insolvency,” the regulator said.
The new custody measures follow a public consultation on regulatory measures to reduce risks to consumers from crypto trading which was launched in October 2022. According to the MAS, the consultation received “significant interest” from a wide range of respondents.
In the official response to the public consultation, Singapore’s central bank noted that the majority of respondents agreed that digital payment token service providers (DPTSPs) should be allowed to deposit user assets in the same trust account as the assets of its other users.
“However, a few respondents disagreed, suggesting that DPTSPs should be required to segregate each customer’s assets from other customers’ assets in separate blockchain addresses,” the MAS wrote. According to the respondents, individual custody segregation could provide customers with greater transparency by allowing them to identify and verify their own holdings.
Apart from custody requirements, the MAS also required crypto companies to conduct daily reconciliation of customer assets and keep proper books and records. DPTSPs are also required to maintain access and operational controls to customers’ DPTs in Singapore and ensure that the custody function is operationally independent from other business
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