Cryptocurrencies such as Bitcoin, Ethereum, and others are popular for several factors. However, due to their decentralized nature, it is easier to use cryptocurrencies for illegal activities. Governments are trying to tackle these problems by introducing anti-money laundering regulations for crypto-related companies. Singapore became another country which decided to comply with FATF recommendations.
The latest version of the Financial Action Task Force recommendations dates to June 2019. The first version of the recommendations became available in October 2018.
On Tuesday, the Monetary Authority of Singapore (MSA) updated the regulatory framework.
Payment Services Act (PSA) 2019 was updated to cover all crypto businesses and exchanges based in Singapore.
Authorities made the decision to bring so-called Digital Payments Token (DPT) services under current anti-money laundering (AML) and counterterrorist (CTF) rules.
Singapore and crypto regulations
Crypto companies will have to register and then apply for a license to operate in the country.
These rules are similar to the Fifth European Anti-Money Laundering Directive (AMLD5). The rules went into effect on January 10.
Starting from January 28, crypto companies will have a month to register with the Monetary Authority of Singapore. They must inform the authorities that they are based in Singapore and are operating DPT business.
The next step is to apply for a payment institution license; Companies will have six months to apply for this license.
Additionally, the monetary authority also added some amendments to the PSA regarding digital assets.
These amendments enabled to widen rules to include the transfer of DPT’s as well as exchanging them. Moreover, it is possible to operate custodial wallets for or on behalf of customers, etc.
Authorities in Singapore made the right decision by enforcing the new regulations. This will help to attract investors from different parts of the world. Crypto-related companies and crypto owners will benefit from the Payment Services Act.