Singapore Crypto Firms Operating Abroad Must Now Be Licensed Under New Law

The Parliament of Singapore passed new measures on Tuesday that force domestically registered companies operating abroad to obtain a license

article-image

Singapore skyline. Source: Shutterstock

share

key takeaways

  • Measures within the Financial Services and Markets Bill provide for a licensing regime for domestic crypto entities operating abroad
  • The bill also provides further powers to ensure financial institutions enhance their security and resilience to hacks

Singapore has passed measures to close a gap that had allowed domestically-registered virtual-asset service providers (VASPs) to offer their business abroad while evading oversight from the country’s financial regulator at home.

Part 9 of the Financial Services and Markets Bill, which passed into law via the city-state’s parliament on Tuesday, now requires those entities to be licensed for the purposes of anti-money laundering and counter-terrorism financing.

The new measures within the bill provide greater powers to the Monetary Authority of Singapore (MAS) to issue prohibition orders while increasing the regulator’s scope against VASPs. MAS is both the central bank and financial regulatory authority of Singapore.

“These entities may claim to be headquartered here to take advantage of Singapore’s global reputation,” Alvin Tan, minister of state and MAS board member, said during a second reading of the bill on Monday. “This creates reputational risks for Singapore.”

The bill seeks to mitigate those risks by licensing VASPs and imposing anti-money laundering and counter-terrorism financing requirements on them, the minister added.

The bill also provides further powers for MAS to ensure financial institutions enhance their security and resiliency to hacks or risk being fined up to 1 million Singapore dollars, roughly $737,580, should a VASP be found negligent in its duty of care.

Singapore’s cryptocurrency regulations are both praised and considered tough among industry participants looking to establish a foothold there. Binance, one of the world’s largest crypto exchanges, withdrew its application for a license to operate its Singaporean subsidiary in December.

“Our decision to withdraw our license application was for strategic and commercial objectives only,” a Binance spokesperson told Blockworks at the time. “Binance recently made a sizable investment into the regulated exchange HGX, which rendered our application for Binance Asia Services redundant.”

The central bank also issued guidelines in January requesting crypto providers restrict the promotions and marketing materials of their services that downplay what it sees as financial risks to the general public.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Frax report cover.jpg

Research

Frax saw continued development in its frxETH liquid staking derivative and Fraxlend money market throughout 2023. Frax V3 introduces an RWA strategy to drive utility to the protocol's cornerstone product, the FRAX stablecoin.

article-image

In a bid to woo institutional crypto traders, Binance wants help from a bank

article-image

Musk’s hesitation to launch his own crypto made sense in previous cycles. But there’s no shame left around here — he should just go for it

article-image

Commissioner Peirce would have done things differently if she could when it comes to her agency’s crypto enforcement actions

article-image

MicroStrategy discloses the purchase of 16,000 bitcoin throughout November

article-image

Digital asset firms face potential new regulatory landscape under Treasury’s proposed authority expansion

article-image

Uniswap Labs will be providing trading APIs to Talos investors through Fireblocks