Regulations for accepting crypto payments

What are the user protection measures (other than AML/CFT) applicable for businesses accepting crypto payments?

"New power to impose user protection measures on certain DPT service providers: To ensure the safekeeping of customer assets held by DPT service providers, MAS may impose (but is not confined to) measures such as:

  • Anti-commingling measures to require a DPT service provider to segregate customer assets from the licensee’s own assets;
  • Ring-fencing customer assets to protect them from claims from other creditors in the event of the licensee’s insolvency; and
  • Maintenance of customer assets and licensee’s assets in a prescribed manner (e.g. maintaining a prescribed percentage of customer assets / licensee’s own assets in a cold wallet).

For a start, MAS may impose such user protection measures on major payment institutions as well as standard payment institutions that process transactions that only involve DPTs, where the value of the transactions that only involve DPTs, and other payment transactions processed by the standard payment institutions, is similar to the thresholds set out in section 6(5) of the PS Act. Should such regulation be necessary, MAS will consult the public and industry."

Source: Allen & Gledhill, last revised on 22 January 2020