By PAUL O’DONOGHUE, Senior Correspondent
SINGAPORE will ban most crypto firms that serve only overseas customers, due to money laundering concerns.
From June 30, these firms must hold a licence from the Monetary Authority of Singapore (MAS). However, the regulator said in a statement: “MAS has set the bar high for licensing and will generally not issue a licence.”
It added: “”The money laundering risks are higher in such business models.
“If their substantive regulated activity is outside of Singapore, MAS is unable to effectively supervise such persons.”
Without a licence, DTSPs (Digital Token Service Providers) must stop offering services to foreign clients once the new rules take effect. The requirement applies to firms dealing in digital payment tokens and capital market products.
Digital token service providers are firms providing services involving digital tokens. These can include cryptocurrencies, stablecoins, or tokenised assets, such as tokenised stocks.
Singapore crypto ban
In a May 30 response to public feedback, MAS said DTSP firms operating in Singapore and only serving foreign clients face higher risks of money laundering and terrorism financing.
“DTSPs may be more susceptible to money laundering risks due to the internet-based and cross-border nature of such services,” it said.
“This would result in a greater risk of DTSPs being engaged in or misused for illicit purposes, to the detriment of Singapore’s reputation.”
The new rules fall under the Financial Services and Markets Act 2022.
Firms that serve customers in Singapore are already regulated. These providers can continue their activities, including serving overseas clients.
MAS said the new regime does not cover tokens like utility or governance tokens. Firms dealing with those are not affected.
The regulator also said it had contacted parties who may fall under the new rules. It aimed to explain the policy and discuss an “orderly wind-down” of affected services.
MAS said that “based on available information, we are aware of a very small number of such providers.”
Firms unsure about the rules can contact MAS at AMLCFT@mas.gov.sg.
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