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Singapore is enforcing new crypto consumer protection measures as the city-state continues applying regulation to its burgeoning crypto industry.
Chief among the new measures, the Monetary Authority of Singapore (MAS)—the country’s chief financial regulator—will enforce a ban on lending and staking for retail customers (individual traders, as opposed to institutional clients), a measure which has been on the table since last October.
The regulator will also require that exchanges move customers’ digital assets into a trust before the end of the year. This is to prevent an FTX-style scenario where their funds are commingled or traded.
The news comes a little over a week after MAS granted in-principle approval to Ripple for a Major Payments Institution License, allowing the company to offer crypto tokens and services in Singapore’s territory.
Stateside, Ripple has been locking horns in court with the chief U.S. securities regulator, the Securities and Exchange Commission (SEC), since December 2020, after the Commission sued it for allegedly offering unregistered securities.
Asia’s crypto boom
While U.S. regulators are imposing a hostile climate on domestic crypto firms, a few Asian territories are keen to accommodate the new technology.
China’s special administrative region of Hong Kong—which, due to its postcolonial legacy, enjoys significant autonomy from the rest of the mainland—is welcoming crypto firms with open arms, despite the fact that a crypto crackdown in China has been ongoing since Summer 2021.
According to Hong Kong’s new regulations, crypto firms have been given a one-year trial period to open up shop in the territory. If the region’s Securities and Futures Commission approves their operations at the end of the trial, companies will be free to apply for a business license.
The new rules keep local exchange operators in their crosshairs, but can also apply to companies outside the territory that actively market their services to Hong Kong residents.
On June 30, Hong Kong authorities announced the establishment of a task force to promote the local development of Web3 industries.
Meanwhile, South Korea also appears to be developing its own strategy to regulate crypto.
In May, the Bank of Korea signed a memorandum of understanding with electronics giant Samsung to jointly conduct research into a central bank digital currency (CBDC).
Last Friday, a key bit of legislation giving the Korean Financial Services Commission and Bank of Korea more power to probe crypto firms and operators was approved by parliament.
The Virtual Asset User Protection Act worries Korean crypto skeptics—some see it as potentially equating crypto firms with traditional finance institutions, thus implicitly recognizing the monetary nature of crypto. It is also perceived as a step towards having a clear regulatory framework in place.