Singaporean official clarifies AML approach regarding virtual currency transactions

Maria Nikolova

When it comes to money laundering, Singapore’s laws do not make any distinction between transactions effected using fiat currency, virtual currency or other ways of transmitting value, Singapore’s Deputy Prime Minister says.

The Singaporean authorities have been trying to strike the balance between mitigating the risks for investors using virtual currencies and not turning their back to innovation. Questions regarding virtual currencies are piling up for top officials, with the latest one concerning the AML/CFT enforcement on virtual currency transactions.

On Monday, Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister in charge of the Monetary Authority of Singapore (MAS), replied to an MP question on how MAS and law enforcement agencies can enforce anti-money laundering and counter-financing of terrorism (AML/CFT) laws on bitcoin currency transactions.

“When it comes to money laundering or terrorism financing, Singapore’s laws do not make any distinction between transactions effected using fiat currency, virtual currency or other novel ways of transmitting value”, he said.

Further, Mr Tharman Shanmugaratnam explained that MAS’ AML/CFT requirements apply to all activities of financial institutions, whether conducted in fiat or virtual currencies. The Commercial Affairs Department (CAD) is empowered to investigate and prosecute all manner of ML/TF cases.

MAS recognizes that virtual currency transactions, given their anonymous nature, may be used to conceal illicit movement of funds, he said. Also, given the the absence of a central clearing house for such transactions, such enforcement is challenging, as it is difficult to identify the parties upon which enforcement orders can be applied.

However, at some stage, fiat currency are exchanged for virtual currency, or vice versa, at intermediaries that buy, sell or exchange virtual currency. MAS therefore intends to impose AML/CFT requirements on such intermediaries, the official noted. MAS is currently conducting public consultation on a proposed Payment Services Bill that will empower the regulator to do this.

In October last year, Mr Tharman Shanmugaratnam struck a cautionary note with regard to investments in cryptocurrencies. He said back then that MAS does not regulate such virtual currencies per se. However, he stressed that the activities that surround them if those activities fall within MAS’s more general ambit as financial regulator, are regulated.

One example is fund-raising. Virtual currencies can go beyond being a means of payment, and evolve into “second generation” tokens, whose sale of is commonly known as an initial coin offering or ICO. As these are financial activities that fall within MAS’ regulatory powers, in August , MAS clarified that if a token is structured in the form of securities, the ICO must comply with existing securities laws aimed at safeguarding investors’ interest. The requirements include having to register a prospectus and having intermediary or exchange operator licences. These intermediaries must also comply with existing rules on anti-money laundering and countering terrorism financing.

Read this next

Industry News

Celsius $750m insurance claims are fraud, says lawyer seeking EU crypto superfund

“It is an intentional deception in aid of a billion-dollar securities offering.”

Institutional FX

DGCX brokers authorized to provide derivatives trading and clearing services

The DFM is looking to provide multiple asset classes such as; equities, ETFs, equities’ futures, crude oil futures, etc. to meet the growing demand from its diversified base of local and international investors.

Digital Assets

EQONEX leaves “crowded crypto exchange space” amid crypto winter

“The recent extreme market volatility and declining trading volumes have added to the headwinds being felt by exchange operators. We take a realistic view that our exchange will not move the needle for us financially over the near-to-medium term.”

Digital Assets

FTX and Paradigm partner for spreads trading: lower risk, lower fees

“This structured spread trading product is the first that will enable crypto investors to utilize cash and carry trades through FTX and Paradigm.”

Industry News

SEC uncovers online retail brokerage hacking scheme

Fraudsters were able to sell their holdings at artificially high prices and reap more than $1 million in illicit proceeds, the SEC alleged. 

Executive Moves

Cornerstone FS taps James Hickman as CEO

“I see great potential in the business from its proprietary technology to its regulatory permissions. It is already delivering an exceptional service to its SME customers and the scalable platform is ideally positioned to add further product capability.”

Retail FX

FCA warns of Lite Forex Pro as crackdown on clone scams continues

The UK Financial Conduct Authority has put out a press release that warns about a new ‘clone firm’ investment scam impersonating LiteForex‎, which rebranded last year as LiteFinance.

Digital Assets

Novogratz’s Galaxy Digital backs out of $1.2 billion deal to buy BitGo

Crypto merchant bank Galaxy Digital would not move forward with its bid to buy digital-asset custodian BitGo.

Executive Moves

OctaFX elevates Nikolas Charalampous to executive director role

OctaFX has promoted its head of dealing, Nikolas Charalampous, to the role of executive director, which saw the expansion of his day-to-day responsibilities and oversight.

<