Singapore Steps Up Crypto Regulation: Investor Protection Prioritized

In a big move, Singapore’s Monetary Authority (MAS) has announced new rules for Digital Payment Token (DPT) service providers in the country. These rules aim to protect consumers and set minimum standards for technology and cyber risk management.

MAS Guides the Way

MAS will also require DPT service providers to discourage cryptocurrency speculation by retail customers by implementing measures like:

• Conflicts of Interest: DPT service providers will be required to identify, mitigate, and clearly disclose potential and actual conflicts of interest. This includes conflicts arising from their own trading activities, financial interests in listed DPTs, and relationships with third parties.
• Listing Criteria: DPT service providers will be required to publish policies, procedures, and criteria that govern the listing of a DPT. This will provide transparency to customers and prevent the listing of DPTs that may pose risks to consumers.
• Customer Complaints: DPT service providers will be required to establish effective policies and procedures to handle customer complaints and resolve disputes. This includes providing timely responses to complaints, providing clear explanations of decisions, and ensuring that complaints are handled fairly and consistently.

The Customer Matters!

To keep things fair and secure, DPT service providers must create good ways to deal with customer complaints and arguments.

• Risk Awareness: DPT service providers will be required to determine a customer’s risk awareness before allowing them to access DPT services. This will involve assessing the customer’s understanding of the risks associated with DPT trading and their investment objectives.
• No Incentives: DPT service providers will be prohibited from offering any incentives to trade in cryptocurrencies. This includes promotions, bonuses, or other rewards that may encourage retail customers to engage in speculative trading.
• No Financing, Margin, or Leverage Transactions: DPT service providers will be prohibited from offering financing, margin, or leverage transactions to retail customers. This will prevent retail customers from taking on excessive leverage and mitigate the risk of losses.

Getting into Action

Digital Payment Token (DPT) services will be implemented through a series of regulations and guidelines, commencing in mid-2024. This phased implementation will provide ample time for DPT service providers to implement these measures appropriately.

A Message from MAS

Ho Hern Shin, Deputy Managing Director (Financial Supervision) at MAS, says that DPT service providers need to protect their customers. While these rules can help, they can’t fully protect customers from the risks of cryptocurrency trading. MAS tells customers to be careful and avoid dealing with companies that aren’t regulated, both locally and overseas.