Cryptocurrency activity due to the new amendments was included in the sphere of payment services, which are subject to similar requirements

Singapore’s central bank will require crypto firms to comply with AML rules

02.04.2024 - 12:15

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3 min

What’s new? The Monetary Authority of Singapore (MAS) has expanded the scope of regulated payment services to include activities related to digital payment tokens (DPT). Thus, the regulator has amended the Payment Services Act to include requirements for DPT service providers to protect users and maintain financial stability. They will start to come into effect in a phased manner over six months starting April 4.

Press release

What else is known? Under the amendments, the law will regulate activities such as the provision of cryptocurrency storage services and facilitating cryptocurrency transfer and exchange.

The amendments will allow MAS to impose anti-money laundering and countering the financing of terrorism (AML/CFT), as well as user protection and financial stability requirements on crypto service providers. They envisage mandatory licensing of crypto companies.

Industry firms will be offered transitional arrangements: they must notify MAS within 30 days and apply for a license within six months from April 4 this year. This will allow them to continue to operate on an interim basis while waiting for the application to be processed. The application must include a report on business operations and AML/CFT compliance from an independent auditor.

Non-compliant companies will have to cease operations in Singapore once the amendments come into force.

The rules for providing cryptocurrency payment services will include separate custody of own and client assets. The latter must be held in a trust account for the benefit of clients. Crypto firms will also be required to keep accounting records and maintain effective systems to protect client assets.

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MAS earlier refused to allow spot bitcoin exchange-traded funds (ETFs) into the local market, but retail investors can trade shares of foreign funds through licensed brokers.

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