The Singaporean government has approved legislation that will give the Monetary Authority of Singapore, or MAS, additional power to respond to crypto firms doing business outside the country.
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Records from the Parliament of Singapore show the government passed the Financial Services and Markets Bill on Tuesday following a second reading on Monday. According to the MAS, the legislation will require virtual asset service providers doing business outside Singapore to be licensed and subject to Anti-Money Laundering and Combating the Financing of Terrorism requirements, or AML and CFT, respectively.
“Digital token service providers could easily structure their businesses to evade regulation in any one jurisdiction, as they operate mainly online,” said MAS board member Alvin Tan, speaking on behalf of senior minister Tharman Shanmugaratnam. “We could be exposed to reputational risks brought by DT service providers created in Singapore, and which provide services relating to virtual assets such as Bitcoin outside Singapore.”
The financial watchdog will have the power to conduct inspections of digital token service providers related to AML/CFT compliance and assist financial regulators and enforcement agencies in other countries. Cointelegraph reported in December that the MAS denied license applications from more than 100 crypto firms seeking to operate in Singapore.
“DT service providers created in Singapore without providing any DT services in Singapore are currently unregulated for AML/CFT,” said Tan. “These entities may claim to be headquartered here to take advantage of Singapore’s global reputation. This creates reputational risks for Singapore.”
The bill will also expand the MAS’ authority to issue prohibition orders against financial industry figures “who have shown themselves to be unfit to perform key roles, activities and functions.” In addition, financial institutions could be fined 1 million SGD — roughly $736,589 — “for a serious cyberattack or disruption to essential financial service.”
Singapore’s monetary authority issued guidelines in January that effectively barred crypto firms from advertising in areas including public transportation, public websites, social media platforms and broadcast and print media. At the time of publication, crypto companies licensed in Singapore are restricted to promoting or advertising services on their own websites or mobile applications.
Companies handling digital assets, including Bitstamp Limited, Coinbase Singapore and Gemini Trust, have been granted exemptions for having a license in Singapore. Binance announced in December that it had withdrawn its application with the MAS, and planned to “wind down” services in the country by February.