The Monetary Authority of Singapore (MAS) announced on Tuesday that it will expand the scope of crypto-related activities that Singapore regulates to include custody services.
Changes in scope include cross-border transfers even when transfers cannot be received or received within the city-state, and the facilitation of the transfer of cryptocurrencies between accounts and exchanges.
This law was passed in 2021 as an amendment to the Payment Services Act (PS Act), which is the framework for regulating payment service providers. It was expected to be enacted in the fourth quarter of 2021, but MAS only implemented the changes on Tuesday. Since 2021, the cryptocurrency sector has experienced significant turmoil due to the FTX crash, leading to regulatory changes across the world.
“This is a long-awaited expansion that brings regulatory clarity to key parts of the cryptocurrency ecosystem, including custodial services,” said Angela Ang, senior policy advisor at blockchain intelligence firm TRM Labs and former MAS regulator. Stated.
This amendment imposes user protection and financial stability-related requirements on digital payment token (DPT) or cryptocurrency service providers.
The amendments include “separating and placing customer assets in trust accounts for the benefit of the customer, maintaining appropriate books and records, and ensuring that effective systems and controls are in place. It is scheduled to take effect within six months from April 4, 2024. .
Entities that already have virtual currency-related activities under the Payment Services Act must begin the transition process within 30 days to temporarily continue their activities until their application is reviewed, and must begin April 2024. License applications must be submitted within 4 days to 6 months.
License applications require a certification report demonstrating compliance with anti-money laundering and anti-terrorist financing requirements, to be certified by an external auditor within nine months.
Companies that do not comply with these requirements will be required to cease all activities, MAS said.
