The Singapore government has passed legislation that will give the Monetary Authority of Singapore, or MAS, additional power to respond to crypto companies doing business outside the country.
Singapore Parliament records show the government passed the Financial Services and Markets Bill on Tuesday after a second reading on Monday.. Under the MAS, the legislation will require virtual asset service providers doing business outside of Singapore to be licensed and subject to Anti-Money Laundering and Countering the Financing of Terrorism, or AML and CFT, requirements, respectively.
“Digital token service providers could easily structure their businesses to evade regulation in any jurisdiction as they operate primarily online,” said Alvin Tan, MAS board member, speaking on behalf of Chief Minister Tharman Shanmugaratnam. “We could be exposed to reputational risks from DT service providers created in Singapore and providing services related to virtual assets such as Bitcoin outside of Singapore.”
The financial watchdog will have the power to conduct inspections of digital token service providers for AML/CFT compliance and assist financial regulators and law enforcement agencies in other countries. Cointelegraph reported in December that the MAS denied license applications from more than 100 cryptocurrency firms seeking to operate in Singapore.
“DT service providers created in Singapore without providing any DT services in Singapore are currently not regulated for AML/CFT”Tan said. “These entities may claim to be based here to take advantage of Singapore’s global reputation. This creates risks to Singapore’s reputation.”
The bill will also expand the MAS’s authority to issue prohibition orders against financial sector figures “who have proven themselves unfit to perform key roles, activities and functions.” In addition, financial institutions could be fined SGD 1 million—approximately $736,589 USD—”for a serious cyber attack or interruption of essential financial service.”
The Monetary Authority of Singapore issued guidelines in January that effectively prohibited crypto companies from advertising in areas such as public transportation, public websites, social media platforms, and broadcast and print media.. As of the time of publication of this report, cryptocurrency companies licensed in Singapore are limited to promoting or advertising services on their own websites or mobile apps.
Companies that handle digital assets, such as Bitstamp Limited, Coinbase Singapore, and Gemini Trust, have received exemptions for having a license in Singapore. Binance announced in December that it had withdrawn its application to MAS, and that it planned to “liquidate” services in the country by February.
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