Singapore Regulator Bans Staking, Lending Services For Retail Investors

The burgeoning crypto industry in the city-state of Singapore has prompted the authorities to implement new measures for consumer protection in the form of regulations.

The financial regulatory body, the Monetary Authority of Singapore (MAS), has introduced a number of measures.

The regulations

One of the top new measures that have been introduced is the ban on crypto staking and lending services to retail investors i.e. individual investors and not institutional ones.

This particular measure had been under discussion since October last year. The crypto exchanges will also be required by the regulatory body to move the digital assets of their clients into a trust.

Exchanges have been given until the end of the year to do so. The goal is to ensure that another scenario like FTX does not happen in the market, where customer funds were traded or commingled.

This news comes more than a week after a Major Payments Institution License was granted to Ripple by the MAS.

Thanks to this license, the company will now be able to offer crypto services and tokens in the territory of Singapore.

Meanwhile, Ripple has been involved in a legal battle in the United States with the Securities and Exchange Commission (SEC).

The SEC filed the lawsuit in December 2020 and is primarily based on the offering of unregistered securities.

Asia’s crypto boom

While domestic crypto companies in the US are facing a hostile climate, the same does not apply to territories in Asia, as a number of them are interested in accommodating the new technology.

Hong Kong is a specially administered region of China, but it has considerable autonomy from the rest of the country, thanks to its postcolonial legacy.

Therefore, even though there has been a crackdown against all things crypto in China since the summer of 2021, Hong Kong appears to be welcoming crypto companies with open arms.

The new regulations in Hong Kong dictate that a trial period of one year will be given to crypto companies for setting up shop in the territory.

If their operations receive approval from the Securities and Futures Commission in Hong Kong by the end of the trial period, they would be permitted to apply for a business license.

These rules are not just applicable to local exchange operators, but also to companies outside the region that are targeting Hong Kong residents with their services.

Other regions

Hong Kong is not the only one to be open to the crypto industry. South Korea has also become proactive in developing its crypto regulation strategy.

A memorandum of understanding was signed in May by the Bank of Korea with Samsung, the electronics giant.

This was done for the purpose of conducting joint research into the matter of a central bank digital currency (CBDC).

Last Friday, the parliament also gave approval to an important piece of legislation that will give more power to the Bank of Korea and the Korean Financial Services Commission to probe crypto companies.

The Virtual Asset User Protection Act is regarded as a step towards the development of a clear framework for regulating crypto.