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Virtual Assets Service Providers (VASPs) that originate from Singapore but offer their business offerings or products abroad are now required to secure licensing from the relevant authorities, a shift in position that may soon become law as the country’s Parliament has passed the Financial Services and Markets Bill on Tuesday.
As reported by Bloomberg, the new bill is deemed essential in curtailing all avenues by which crypto-hinged trading platforms will be a conduit for Anti-Money Laundering (AML) offences.
“Virtual asset service providers created in Singapore that provide services only elsewhere are unregulated for anti-money laundering and countering the financing of terrorism (AML/CFT), which creates reputational risks for the Republic,” said Monetary Authority of Singapore (MAS) board member Alvin Tan.
Singapore’s approach to supporting the growing digital currency ecosystem is multi-faceted. While the country’s regulators believe in the revolutionary potentials of these nascent asset classes and the technologies powering them, a great deal of caution is being exercised as it does the hard work of cautiously picking the companies it grants its licenses.
While some financial institutions like the Amber Group and DBS bank have enjoyed an excellent regulatory regime to operate in Singapore, mainstream players like Binance have had to pull out of the race for a license to operate in the country with the almost unending waiting process. In the MAS’s defence, the average investor who engages with the crypto space must be protected, hence the essence of the due diligence it takes in issuing licenses to apply to crypto platforms.
The recently passed bill also seeks to curb the incident of hacks and data breaches on protocols linked to Singaporean regulators. Per the new provision, a maximum fine of S$1 million ($737,050) can now be imposed on financial institutions, presumably, crypto-based firms, if they experience cyberattacks or their services are disrupted.
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