MAS Orders Crypto Firms To Keep Customer Assets In a Trust By Year-End The MAS has also restricted cryptocurrency service providers from facilitating lending and staking tokens to retail customers, but institutional and accredited investors could continue to take advantage of these services

By Teena Jose

Opinions expressed by Entrepreneur contributors are their own.

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The Monetary Authority of Singapore (MAS) has announced that crypto service providers in Singapore would need to deposit customer assets under a statutory trust before the end of the year for safe keeping. The public consultation on this matter began in October last year.

The MAS has also restricted cryptocurrency service providers from facilitating lending and staking tokens to retail customers, but institutional and accredited investors could continue to take advantage of these services.

Moreover, the MAS indicated that its position on banning crypto entities from facilitating lending and staking of tokens for retail customers could change in the future.

Under the new rules that are expected to kick in later this year, digital payment token (DPT) firms will have to conduct daily reconciliation of customers' assets, keep proper records, as well as maintain access and operational controls of customers' DPTs in Singapore.

Given the limited number of established independent third-party custodians now, MAS said it would not mandate the use of independent custodians for customer assets for now. But the firms will have to ensure that the custody function is operationally independent of other business units. A custodian in finance is a specific entity that holds customers' assets for safekeeping

Commenting on this development, Manan Vora, SVP of strategy and business operations at Liminal, Singapore headquartered, wallet infrastructure and custody solutions platform, has said that, "At Liminal, we have made it our mission to make users aware of the risks involved in storing digital assets without control over the private keys. We strongly believe that this is a masterstroke by MAS which is expected to further boost the adoption of digital assets by significantly reducing the risk, preventing misuse of user funds, and ensuring full recovery of assets in case of any unfortunate event."

He further said that this development strengthens Singapore's position as a supporter of emerging technologies which offers a fertile ground for crypto/blockchain-related services. It will attract global entrepreneurs to leverage Singapore's strong and decisive policy framework for digital assets. Adding that, "Overall, this is a welcome move and we are one step closer to a compliant, regulated, and transparent crypto ecosystem in South East Asia."

Teena Jose

News Desk Reporter with Entrepreneur India

Teena is a post graduate in financial journalism. She has an avid interest in content creation, digital media and fashion.
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