Singapore has given the green light to a new law that provides stricter oversight of cryptocurrency providers, reports confirm.
Singapore-based virtual asset service providers (VASPs) will need to be licensed even if they only carry out business overseas. These entities will now be regulated under anti-money laundering (AML) and counter-terrorism financing guidelines (CFT).
The Financial Services and Markets Bill states, “Entities that conduct the business of providing digital token (DT) services in Singapore are subject to current legislation regardless of where they are established. However, DT service providers created in Singapore without providing any DT services in Singapore are currently unregulated for AML/CFT.”
This move aims to safeguard the island’s reputation for financial probity as it plays host to more crypto-related businesses.
Additionally, the bill ensures that the AML/CFT requirements imposed on digital payment token service providers, under the Payment Services Act, are in line with those of digital token (DT) service providers. It also gives more power to the Monetary Authority of Singapore (MAS) over the virtual asset sector.
Singapore announces penalties
Singapore has also announced penalties of over $1 million as part of technology risk management (TRM). This means that institutions can be held liable for serious cyberattacks or disruption to essential financial services.
Even as the city-state is attempting to position itself as a global crypto hub, the MAS has been drawing a tighter regulatory framework.
In Jan, MAS issued guidelines discouraging cryptocurrency trading by the general public. And soon after, major lender DBS halted plans to extend crypto services to retail consumers.
However, despite the regulatory shakeups, Singapore has issued several crypto licenses to both domestic and international players, including Digital Treasures Center (DTC), Hodlnaut, Paxos, and Sygnum.
According to Tharman Shanmugaratnam, the minister in charge of the MAS, the authority has received over 580 license applications.
The minister stated that 87 applications have been approved so far, and only 11 have been rejected. Of these, 147 applications were withdrawn and 170 are currently under review.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.