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Singapore passes law to tighten rules for crypto providers

Singapore passes law to tighten rules for crypto providers. (PHOTO: ROSLAN RAHMAN/AFP via Getty Images)
Singapore passes law to tighten rules for crypto providers. (PHOTO: ROSLAN RAHMAN/AFP via Getty Images) (ROSLAN RAHMAN via Getty Images)

By Faris Mokhtar

(Bloomberg) – Singapore has approved a law that will tighten rules for cryptocurrency providers in the latest sign of its tentative embrace of the industry.

The new legislation will require virtual asset service providers in the city-state which only do business overseas to be licensed. Currently, such firms are not regulated for anti-money laundering and countering the financing of terrorism. The law was passed in parliament on Tuesday.

Singapore’s additional tightening comes on top of the financial regulator’s recent move to discourage companies in the cryptocurrency space from advertising their services to the public, underscoring the nation’s cautious approach.

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The city-state is welcoming the technologies of cryptocurrency and has launched a framework for regulating the industry when other countries such as China have opted for outright bans. On the other hand, it doesn’t want citizens getting burned by speculation, and is picky about who it lets in.

Binance is the biggest player to have become disillusioned by the moves, as it in December withdrew its application for setting up a cryptocurrency bourse.

Other key items from the Financial Services and Markets Bill:

  • Gives greater powers to the Monetary Authority of Singapore to prohibit individuals who are deemed unfit from performing key roles, activities and functions in the financial industry. These will now include individuals providing payment services and conducting risk management.

  • Imposes higher maximum penalty of S$1 million ($737,050) on financial institutions if they experience cyber attacks or their services are disrupted.

© 2022 Bloomberg L.P.