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Singapore Broadens Regulatory Framework for Crypto Service Providers
The Monetary Authority of Singapore (MAS) has announced amendments to the Payment Services Act, signaling a broadening of its regulatory framework for crypto service providers. The amendments, set to be implemented in stages starting from April 4, aim to enhance user protection and safeguard financial stability.
Key Changes and Implications
- The amendments will encompass custodial services for digital payment tokens (DPTs), facilitation of DPT transmission, and cross-border money transfers, even in cases where funds are not received in Singapore.
- Under the amended regulations, the MAS will have the authority to impose requirements related to anti-money laundering (AML), countering the financing of terrorism (CFT), user protection, and financial stability on DPT service providers.
- Transitional arrangements will be provided for entities affected by the expanded regulatory scope, with affected entities required to notify the regulator within 30 days and submit a license application within six months from April 4.
Expert Insights
Angela Ang, a senior policy advisor at blockchain intelligence firm TRM Labs and former MAS regulator, views this expansion as providing long-awaited regulatory clarity to crypto custody players in Singapore. Kelvin Low, a law professor at the National University of Singapore, anticipates these changes and suggests that any decisions by crypto exchanges or firms to exit Singapore due to these changes would have been made well in advance.
Consumer Protection Measures
In addition to regulatory amendments, the MAS has released guidelines outlining consumer protection measures that DPT service providers must adhere to under the Payment Services Act. These measures include segregating customer assets, maintaining proper books and records, and ensuring the security and integrity of customer assets. The guideline is slated to come into effect on October 4.
Overall, these regulatory changes represent a significant step in the evolution of Singapore’s approach to regulating crypto service providers, with a focus on enhancing user protection and safeguarding financial stability.
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