Singapore Passes Law to Tighten Rules for VASPs

  • The Financial Services and Markets Bill requires VASPs doing business outside Singapore to be licensed and subject to AML and CFT requirements.
  • The Monetary Authority of Singapore will also receive additional power when issuing prohibition orders against industry figures who are unfit to perform “key roles, activities and functions”.
singapore

Landscape of Singapore business building around Marina bay.
MOLPIX / Shutterstock

The government of Singapore has passed a law that gives the Monetary Authority of Singapore (MAS) additional power over the crypto-related businesses, Bloomberg reported on 5 April.

The new legislation, titled “Financial Services and Markets Bill“, will require virtual asset service providers (VASPs) — that are based in the city but provide services outside of Singapore — to be licensed with the MAS. The new law was designed to place such entities under Singapore’s anti-money laundering (AML) and combating the finance of terrorism (CFT) requirements. MAS board member Alvin Tan said during the second reading of the bill on Monday:

“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 FSM Bill seeks to mitigate such risks by licensing these players and imposing AML/CFT requirements on them. The Bill also enhances MAS’ powers to ensure that FIs bolster the security and resilience of digital services.”

Singapore’s new law will also allow the MAS to conduct inspections of VASPs connected to AML/CFT compliance, as well as assist foreign financial regulators and enforcement agencies. In addition, the MAS will now have greater authority when issuing prohibition orders against industry figures who are deemed unfit to “perform key roles, activities and functions”. The bill also imposes a higher maximum penalty of 1 million SGD — around $740,000 — on VASPs that experience cyberattacks or service disruptions.

Back in January, Singapore’s MAS issued new guidelines that effectively banned crypto firms from advertising their business in public areas. Several companies, such as Huobi and Binance, have decided to withdraw their MAS applications and wind down their services in the area.

Discussion
Related Coverage
Crypto.com Granted In-Principle License in Singapore
  • One of the advantages of receiving a Major Payment Institution license is that it allows companies to provide Digital Payment Token services to customers in Singapore.
  • In order to acquire the license, Crypto.com was obliged to act in accordance with AML and CFT legislations, as well as comply with a number of legal demands.
June 22, 2022, 1:33 PM
Kris Marszalek, Co-Founder and CEO at Crypto.com

Kris Marszalek, Co-Founder and CEO at Crypto.com, on the MoneyConf Stage during day two of RISE 2018 at the Hong Kong Convention and Exhibition Centre in Hong Kong. Seb Daly/RISE via Sportsfile

Singapore’s MAS to Explore Blockchain and DeFi Use Cases
  • Called Project Guardian, the new MAS pilot will be led by financial heavyweights J.P. Morgan, DBS Bank, and Marketnode.
  • The first pilot of the project will explore DeFi applications in wholesale funding markets through the creation of liquidity pool of tokenized bonds and deposits.
Gibraltar to Combat Crypto Market Manipulation With New Rules
  • The legislation will implement new standards for crypto market integrity in Gibraltar, designed to combat insider trading and market manipulation in the sector.
  • DLT providers will now be required to seek out and prevent insider trading, and the publication of misleading information aimed at manipulating the crypto market.