Singapore expands cryptocurrency regulations, introduces stricter user protection requirements

The Monetary Authority of Singapore (MAS) is expanding the regulatory framework for cryptocurrency service providers by amending the Payment Services Act to enhance user protection and safeguard financial stability.

The amendments announced on Tuesday will be implemented in phases starting April 4. MAS emphasized that the changes include storage services for digital payment tokens (DPTs), facilitation of DPT transfers, and cross-border remittances. If funds are not received in Singapore.

Under the revised regulations, 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 of DPT service providers.

Transitional measures will be provided for businesses affected by the expanded regulatory scope. However, affected companies must notify regulators within 30 days and submit permit applications within six months from April 4.

The expansion brings long-awaited regulatory clarity to cryptocurrency custodians in Singapore, according to Angela Ang, senior policy advisor at blockchain intelligence firm TRM Labs and former MAS regulator.

Kelvin Low, a law professor at the National University of Singapore, said the changes were expected and unlikely to surprise industry insiders. He suggested that the decision for cryptocurrency exchanges or companies to leave Singapore may have been made in advance due to these changes.

In addition to the regulatory amendments, MAS has published guidance outlining the consumer protection measures that DPT service providers must comply with under the Payment Services Act. These measures include segregating customer assets, maintaining appropriate books and records, and ensuring the security and integrity of customer assets. This guideline will take effect from October 4.

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