Singapore's MAS Enhances Crypto Regulations to Guard Retail Investors

By: Isha Das

The Monetary Authority of Singapore (MAS) has reassuringly enforced sterner regulations for crypto service providers, in efforts to safeguard retail investors against speculative risks abundant in the crypto market. This move follows their consultation paper in response to feedback on proposals for digital payment token services.

Service providers offering Digital Payment Token (DPT) have been issued directives, encouraging them to adopt practices that would discourage retail customers from speculative crypto trades. The measures involve avoiding credit card payments for transactions and doing away with incentives for cryptocurrency trading, MAS stated in a Nov. 23 announcement.

DPT service providers are further discouraged from offering financial products with margin or leverage. They are compelled to assess the risk awareness of their customers and not to include the value of crypto assets when deciding a client's net worth. Additionally, it is now critical for DPTs to not only actively identify and control potential conflicts of interest but also openly circulate details about policies and processes guiding the listing of digital assets. It is now mandatory for these providers to manage customer complaints and dispute resolutions effectively.

The clearer, stricter rules are a result of the collapse of multiple crypto-related firms and subsequent impacts on millions of Singaporeans.

Notably, MAS warned that even with these measures in place, the volatile and speculative nature of cryptocurrency trading cannot be completely protected against.