The Monetary Authority of Singapore (MAS) has taken a significant step to increase regulation within the country’s burgeoning cryptocurrency market. In a move that aims to bring greater transparency and control, MAS has extended the scope of regulated crypto-related activities. This regulatory enhancement specifically targets custody services and outlines clear rules for international money transfers and transactions between user accounts and crypto exchanges. However, it doesn’t apply to the buying and selling of cryptocurrencies within Singapore’s borders.
Payment Services Act Amendment Sparks Regulatory Update
This latest regulatory expansion originates from changes to the Payment Services Act (PS Act) in 2021, designed to oversee payment service providers. Although initially set to be enforced in late 2021, the implementation was postponed until the present due to the global upheaval within the crypto sector, including the downfall of prominent trading platforms like FTX.
Former MAS official and current senior policy advisor at TRM Labs, Angela Ang, views the regulatory update, particularly the definitive guidelines for custody services, as a highly anticipated development for the crypto community.
Enhanced Requirements for Crypto Businesses
MAS’s revised regulations impose several obligations on digital payment token service providers to safeguard users and uphold financial stability. These responsibilities include the separation of customer assets into trust accounts, meticulous record-keeping, and the deployment of robust internal controls. Companies have a six-month window from April 4, 2024, to comply with the new requirements.
Existing crypto-related businesses must begin their licensing application within 30 days and secure a license within six months to continue operating while their applications are under review. Additionally, they are compelled to submit an external auditor-approved compliance report focused on anti-money laundering and counter-terrorism financing within nine months.
Implications for the Reader
- Companies dealing in cryptocurrencies in Singapore will face stricter oversight and must adhere to new trust account regulations.
- The amendments reflect a global trend towards more stringent cryptocurrency regulation
- Non-compliance could result in a business suspension, signaling MAS’s commitment to financial security and investor protection.
MAS emphasizes that businesses failing to comply with these new directives will be forced to halt all crypto-related operations. Through such rigorous actions, Singapore demonstrates its intention to foster a secure and regulated environment for digital currency transactions, merging innovative growth with essential safeguards for investors and the integrity of the financial system.