Singapore Drafting AML Regulations Around Cryptocurrency
Singaporean Deputy Prime Minister Tharman Shanmugaratnam, who also serves as Minister in Charge of the Monetary Authority of Singapore (MAS), has revealed that MAS is in the process of devising a new regulatory framework to address money laundering and terrorist financing concerns relating to cryptocurrency.
He issued the statement in an October 3 letter in response to Parliamentarian Cheng Li Hui, who had asked if the government was conducting studies into the risks posed by cryptocurrencies and whether these assets would eventually require regulation.
Shanmugaratnam explained that MAS, which functions both as Singapore’s central bank and financial regulating body, lacks the authority to impose rules on cryptocurrencies themselves. It can, however, restrict “the activities that surround them if those activities fall within our more general ambit as financial regulator.” In addition to money laundering and funding terrorism, these activities also include holding token offerings that issue coins doubling as securities. In the case of such an offering, he elaborated, “The requirements of having to register a prospectus, obtain intermediary or exchange operator licences, will apply,” as will “rules on anti-money laundering and countering terrorism financing.” He pledged that MAS would continue to examine the need for “more targeted legislation” on token offerings in addition to the securities laws that are already on the books.
The statement concluded by referring to an August advisory, published jointly by MAS and the Commercial Affairs Department, that warns consumers of the dangers inherent in treating cryptocurrency as an investment vehicle.
Earlier this year, MAS concluded Project Ubin, an experiment that placed a tokenized form of the Singapore dollar on a distributed ledger. In late September 2017, reports began circulating of regional banks freezing accounts associated with cryptocurrency firms.