New legislation approved by the government in Singapore would grant greater authority to MAS (Monetary Authority of Singapore) for dealing with crypto companies that are operating outside the country. The Financial Services and Markets Bill had had its second reading on Monday and the records from the country’s Parliament showed that it was passed by the government on Tuesday. The financial watchdog disclosed that as per the new law, all virtual asset providers that are operating outside of Singapore would have to obtain a license and would also need to comply with CFT and AML policies, which are known as Combating the Financing of Terrorism and Anti-Money Laundering.
Alvin Tan, a board member of the Monetary Authority of Singapore, said that since digital token service providers operate primarily online, they can structure their business in a way to evade regulation. He spoke on behalf of Tharman Shanmugaratnam, the senior minister. He said that these providers could create reputational risks in Singapore, along with any of those who are offering crypto services involving assets like Bitcoin outside the country. The new law will grant power to the financial watchdog to carry out inspections of the virtual asset service providers when it comes to compliance with CFT/AML policies.
Furthermore, the MAS would also be able to offer its assistance to enforcement agencies and regulatory authorities in other countries. It had been reported back in December that license applications of more than 100 crypto companies had been denied by the MAS that had wanted to operate in the country. Tan said that digital token service providers who are not offering their services in the country but have been launched in Singapore are currently not adhering to AML/CFT. He said that these organizations establish their headquarters in Singapore in order to benefit from its global reputation, which puts the country at reputational risk.
The bill will also grant authority to the MAS to give prohibition orders against figures in the financial industry who it considers unfit for performing key functions, activities and roles. Furthermore, a fine of about 1 million SGD ($736,589) could be imposed on financial institutions for disruption of financial services, or in the case of a cyberattack. Guidelines had been issued by the financial authority in Singapore back in January, which had banned crypto companies from advertising on social media platforms, public websites, public transportation, and print and broadcast media.
Currently, crypto companies in Singapore are only permitted to promote their services on their own websites and mobile applications. There have been exceptions made when it comes to needing a license in Singapore for companies that handle digital assets. These include Gemini trust, Coinbase Singapore and Bitstamp Limited. The world’s leading crypto exchange in terms of trading volume, Binance, had announced back in December that it had decided to withdraw its application from the Monetary Authority of Singapore. It further added that it would shut down its services in the country by February. The new law in Singapore is meant to provide further protection to those participating in the crypto space.