Singapore has given the green light to a new law that provides stricter oversight of cryptocurrency providers

Singapore’s parliament has passed a law that only crypto asset service providers based in the city-state but operating overseas must apply for a license.

Singapore passes law tightening rules for crypto businesses

Singapore’s new cryptocurrency law requires city-state-based crypto businesses operating overseas to comply with anti-money laundering and anti-terrorism measures.

The Singapore Parliament passed the law on Tuesday as part of the Financial Services and Markets Bill. It stipulates that domestic crypto asset service providers operating abroad will be required to obtain a license.

To date, such platforms are not regulated to combat money laundering and combat terrorist financing. The move demonstrates that the city government is tightening the rules for crypto providers by giving more power to the Monetary Authority of Singapore.

The MAS, therefore, reserves the right to prohibit individuals deemed unfit to perform key roles, activities, and functions within the financial industry. These will include those providing payment services and performing risk management.

The Parliament-voted bill also includes a maximum penalty of S$1 million (or $730,050) for financial institutions if they face cyberattacks or their services are disrupted. The move comes after Singapore’s multinational banking and financial services group – DBS Bank – announced that it will not be expanding its crypto trading services to retail customers anytime soon. The bank withdrew its original plans citing regulatory hurdles in enabling digital asset services in the retail sector.

The MAS previously clarified that it does not have any intention to ban Bitcoin and other cryptocurrencies even though some countries, including China, have opted for a full-blown ban.

Despite choosing the regulatory route, the city’s central bank has issued guidance discouraging crypto asset service providers from promoting and advertising cryptocurrencies because they believe participation in an asset class is risky and not suitable for all investors.

As far as the NFTs are concerned, Singapore has taken a neutral stance on technology. As previously reported, Finance Minister Lawrence Wong has revealed that current income tax rules will apply to income derived from NFT transactions or business therein.
However, as Singapore does not have a capital tax regime, users generating profits from NFT transactions will not be taxed.

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