Singapore regulator proposes new stricter rules for the crypto sector
July 21, 2020, 7:50AM EDT · 2 min read
- The Monetary Authority of Singapore has proposed the “New Omnibus Act for the Financial Sector” that would regulate crypto businesses
- The regulator currently supervises crypto firms that are located in and do business in Singapore. The new act, if passed, would also regulate Singapore crypto firms that do business overseas
The Monetary Authority of Singapore (MAS), the country's financial regulator and de facto central bank, has proposed new stricter rules for crypto businesses, in line with the Financial Action Task Force (FATF) standards.
The regulator wants to have enhanced powers to prohibit any unsuitable entity from conducting business in Singapore and wants to regulate and license crypto businesses that provide services outside of Singapore.
To that end, MAS has today published a consultation paper for bringing the "New Omnibus Act for the Financial Sector." The 99-page consultation paper seeks public feedback on the "harmonized and expanded power" of the regulator.
MAS already regulates crypto businesses under its newly enacted Payment Services Act, which came into effect this January. But this act regulates crypto (or "digital token" in Singapore's context) firms that are located in Singapore and do business in the country. The regulator now wants to supervise entities that are based in Singapore and conduct business outside of the country.
"Given the internet-based nature of such operations, there may be entities created in Singapore that do not perform such services in Singapore, but offer such services outside of Singapore and that are not captured under current legislation. MAS intends to regulate such entities for ML/TF [money laundering/terrorist financing] risks," the consultation paper reads.
These entities could include any individual operating from a permanent place of business in Singapore; any corporation incorporated in Singapore; any partnership or limited liability partnership formed in Singapore.
Any entity that is "not fit and proper" to engage in regulated activities could be issued a prohibition order if the new act gets passed into law. MAS said this is similar to the approach taken in the U.K. and Australia.
"In exercising this power, MAS will adopt a risk-proportionate approach, taking into account the nature, severity and impact of the misconduct," said the regulator. MAS has also proposed raising the maximum penalty for contravening technology risk requirements to SG$1 million (~$700,000).
The consultation paper is open for public comments until August 20.
Singapore is one of the most famous Asian countries for the crypto sector due to its regulatory-friendly environment. There are at least 153 crypto and blockchain companies headquartered in Singapore, across 27 different sub-categories, according to The Block Research.
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