Crypto Exchanges In Singapore Will Now Keep Client Money in a Trust

After the implosion of the popular crypto exchange FTX in 2022, many governments started monitoring the activities within the industry. 

One of the governments that took up the challenge is Singapore. A recent report disclosed that the city-state has measures to prevent the losses crypto investors recorded from the FTX crash. 

Even before FTX collapsed, Singapore had started consulting on digital asset regulations and banning staking and lending for retail crypto investors. 

Singapore Changes Things For Crypto Exchanges

In a recent report by BNN Bloomberg, Singapore will mandate crypto exchanges to keep their customer’s assets in a trust before 2023 runs out. The report noted that this approach is a measure to safeguard the customers’ funds in an FTX-like crash. 

Another measure is the ban on lending and staking for retail crypto investors. The Monetary Authority of Singapore revealed the decision in a statement today, July 3. 

MAS started the plan to tighten the regulatory oversight for digital assets in October 2022, even before FTX crashed in November. After consultation, the city-state is restructuring its crypto industry to protect consumers.

 But according to the regulator’s statement, “Regulations alone cannot protect consumers from all losses, given the extremely high risk and speculative nature of digital payment token trading.”

As such, MAS further stated that “utmost caution” is mandatory for those who interact with digital assets through trading. 

Other Places Push to Attract More Individual and Institution Participation in Crypto

While Singapore tightens its regulatory regime for crypto participants, some other governments are taking steps to increase participation.  

One such jurisdiction is Hong Kong. The city is opening its doors to institutions and individuals to access crypto-related opportunities. In early June, the city allowed interested firms to apply for licenses, permitting them to run crypto trading hubs and exchanges. 

A Fortune report on June 1 disclosed the city reinstated retail crypto trading for some exchanges after China banned it in 2018. 

According to what the Chief Executive of the Hong Kong Monetary Authority, Eddie Yue, said during the Bloomberg Wealth Asia Summit in May, “Our regulations will be tight.” 

“We will let the industry develop and innovate. We will let them create the ecosystem here, and that actually brings a lot of excitement. But that doesn’t mean light-touch regulation.” Yue added. 

Reacting to the announcement, a blockchain lecturer and fintech consultant, Eddie Chou, said, “The fact that an international finance hub like Hong Kong is setting out to create and support a digital assets trading environment means a boost of investor confidence in the industry,

In a recent Fortune report on June 26, the biggest bank in Hong Kong, HSBC, now permits investors to trade Bitcoin and Ethereum ETFs.