Singapore is applying new measures to protect consumers of cryptocurrencies, increasing market regulation. The Monetary Authority of Singapore (MAS), the country’s main financial regulator, is going to introduce a ban on issuing loans and staking tokens for retail customers (individual traders). Cryptocurrency companies will now be able to offer such services only to institutional clients.
It is expected that in addition the regulator will require that by the end of the year the exchanges transfer the digital assets of customers to trust management. This is done to prevent an FTX-style scenario where investors’ funds are pooled or exchanged.
Interestingly, the announcement appeared a little more than a week after MAS granted Ripple in principle approval to obtain a license from a large payment institution, allowing the company to offer cryptocurrency tokens and services in Singapore. It has to be reminded that since December 2020, Ripple has been having a litigation against the SEC in the United States: the Commission sued the company for offering unregistered securities.
Asian Crypto Boom
Against the background of the creation of a climate hostile to cryptocurrencies by US regulators, some Asian states are seeking, on the contrary, to introduce a new technology. The Hong Kong Special Administrative Region of China, which, because of its postcolonial heritage, enjoys considerable autonomy from the rest of the mainland, welcomes crypto firms with open arms, despite the fact that crypto repression in China has been ongoing since the summer of 2021.
According to the new rules of Hong Kong, crypto firms were given a trial period of one year to open a representative office in the city. If the region’s Securities and Futures Commission approves their operations, companies will be free to apply for a business license.
The new rules are mainly aimed at local exchange operators, but can also apply to companies outside Hong Kong if they actively sell their services to residents of the city.
At the same time, South Korea also seems to be developing its own cryptocurrency regulation strategy. In May, the Bank of Korea signed a memorandum of understanding with electronics giant Samsung to jointly conduct research on the central bank’s digital currency (CBDC).
Last Friday, parliament approved a key law giving the Korean Financial Services Commission and the Bank of Korea more powers to verify crypto firms and operators
The law on the protection of users of virtual assets worries Korean cryptosceptics — some see it as a potential equating of crypto firms with traditional financial institutions, thereby implicitly recognizing the monetary nature of cryptocurrencies. On the other hand, such a decision is perceived by many as a step towards creating a clear regulatory framework.
