In a latest announcement, the Financial Authority of Singapore (MAS) revealed its plans to impose stringent rules on cryptocurrency transactions for retail traders. The brand new guidelines, that are anticipated to be among the many most restrictive on the earth, intention to guard customers from the excessive dangers and volatility of digital property.
Singapore is among the most tasty locations for crypto companies, due to its clear and supportive regulatory framework. Nonetheless, getting a license from the Financial Authority of Singapore (MAS) is just not simple. Actually, a lot of the crypto organizations which have utilized for a license have been rejected or are nonetheless pending.
In line with Daybreak Chew, the communications director of MAS, the regulator is worried in regards to the rising reputation of cryptocurrencies amongst retail traders who might not totally perceive the implications and dangers of their investments. Chew mentioned that MAS desires to make sure that retail traders don’t entry cryptocurrency services which can be unsuitable for them.
Tekedia Mini-MBA (Sep 11 – Dec 2, 2023) opens registrations for a brand new version. Price is N90,000 or $170 when you register by Sept 5, 2023. Register here
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and co-invest in Africa’s best startups here. Subsequent cycle begins Oct 2, 2023.
The proposed rules would require intermediaries that supply cryptocurrency companies to retail traders to acquire a license from MAS and adjust to strict requirements of conduct, disclosure and danger administration. Moreover, retail traders should bear an evaluation of their information and expertise earlier than they will entry cryptocurrency services. They will even must acknowledge in writing that they’re conscious of the dangers and potential losses concerned.
The brand new guidelines is not going to apply to accredited or institutional traders, who’re deemed to have extra monetary sources and class to cope with the complexities and uncertainties of cryptocurrency markets. MAS additionally clarified that the rules is not going to have an effect on the event and innovation of blockchain know-how in Singapore, which it helps as a part of its Good Nation imaginative and prescient.
The announcement comes amid a world regulatory crackdown on cryptocurrencies, as authorities all over the world grapple with the challenges and alternatives posed by the rising asset class. Whereas some international locations, reminiscent of China and India, have taken a hardline stance towards cryptocurrencies, others, such because the US and the UK, have adopted a extra balanced method that seeks to foster innovation whereas safeguarding shopper pursuits.
Singapore has been one of the crucial progressive jurisdictions by way of cryptocurrency regulation, having launched a complete framework for digital cost token service suppliers in 2020. The framework covers anti-money laundering, counter-terrorism financing, cybersecurity and shopper safety measures. Nonetheless, with the brand new guidelines for retail entry, Singapore is about to grow to be one of many hardest regulators of cryptocurrency on the earth.
In line with a report by Bloomberg, MAS has acquired over 300 functions from crypto corporations since 2020, however solely 10 have been authorized to date. The principle purpose for the low approval fee is the excessive requirements that MAS units for anti-money laundering and counter-terrorism financing (AML/CTF) compliance.
MAS expects crypto corporations to have sturdy AML/CTF insurance policies and procedures, in addition to efficient techniques and controls to detect and forestall illicit actions. Crypto corporations additionally must display that they’ve enough sources, governance and danger administration practices to function in a protected and sound method.
The stringent necessities replicate MAS’s dedication to safeguarding the integrity and stability of Singapore’s monetary system, in addition to defending customers and traders from fraud and scams. MAS additionally desires to make sure that Singapore stays a good and trusted hub for fintech innovation and adoption.
Whereas some crypto corporations might discover the licensing course of difficult and time-consuming, others see it as a possibility to distinguish themselves from the competitors and acquire credibility and belief from prospects and regulators. As an example, Gemini, one of many 10 licensed crypto corporations in Singapore, has invested closely in constructing a robust compliance tradition and infrastructure.
Gemini’s Chief Compliance Officer for Asia Pacific, Jeremy Ng, mentioned in an interview with Bloomberg that “compliance is a aggressive benefit” and that “being licensed brings us nearer to our imaginative and prescient of empowering the person by crypto”.
Because the crypto business matures and evolves, extra international locations are more likely to observe Singapore’s instance and undertake a complete and balanced regulatory method. Crypto corporations that wish to succeed on this dynamic and aggressive atmosphere might want to embrace regulation as a catalyst for innovation and development, fairly than a barrier or burden.