Singapore, known for its forward-thinking attitude towards financial technology, recently expanded its regulatory oversight of crypto-related activities. Monetary Authority of Singapore (MAS) announced On Tuesday, it announced it would regulate custody services and cross-border transfers involving digital assets, even if the transactions do not take place within the city-state.
The move comes as an amendment to the Payment Services Act (PS Act), a framework designed to regulate payment service providers. The law, first passed in 2021, aimed to provide regulatory clarity in the rapidly evolving digital asset landscape. However, the amendments, which should have been enacted earlier, were only recently implemented, reflecting the growing importance of regulating digital asset activities amidst global market volatility.
Expanding regulatory oversight is seen as an important step to strengthen user protection and ensure financial stability in the world of digital assets. Angela Ang, senior policy advisor at the TRM Institute and former MAS regulator, welcomed the move as much-needed clarity, particularly regarding custodial services.
Cryptocurrency regulation and investor protection
Under the new regulations, cryptocurrency service providers will have to follow strict requirements. This includes segregating customer assets into trust accounts, maintaining transparent records, and having robust systems and controls in place. These measures are aimed at protecting investors’ funds and reducing the risk of financial fraud within the industry.
Entities already engaged in crypto-related activities under the Payment Services Act must undergo a transition process within 30 days and submit a license application within six months. The application process requires the submission of a certification report on compliance with anti-money laundering and counter-terrorist financing requirements, which will be verified by an external auditor within nine months.
MAS has made it clear that entities that do not comply with these regulations must cease all crypto-related activities. This strict enforcement underscores Singapore’s commitment to maintaining the integrity of its financial system while fostering innovation in the burgeoning crypto sector.
In conclusion, Singapore’s decision to expand regulatory oversight of cryptocurrency activities reflects a proactive approach to addressing the challenges posed by digital currencies. By introducing strong regulations, Singapore aims to strike a balance between fostering innovation and protecting investor interests in the rapidly evolving crypto environment.
