On the 6th, the Monetary Authority of Singapore (MAS, equivalent to a central bank) clarified the new rules for cryptocurrency (virtual currency) companies that were previously announced.
At the end of May, MAS announced a series of new regulations. In particular, "Digital Token Service Providers (DTSP)" providing services outside of Singapore are required to obtain a license, and those without a license were notified to cease operations after July 1.
Due to the confusion in the industry regarding the scope of this rule, MAS is emphasizing the range of businesses that are subject to it this time.
It was stated that the new rules apply only to operators that provide services outside of Singapore.
Operators providing services to customers in Singapore are already subject to regulation, and it is stated that this regulation does not affect the operations of companies that have obtained licenses. These operators continued to say that they can still provide services to customers outside of Singapore.
Furthermore, it is emphasized that service providers such as tokens used only as utility tokens or governance tokens are not subject to licensing or regulation and are not affected.
What is a utility token?
A utility token that functions as a right to use specific services. It can be used to pay for goods and meals instead of cash, or by holding it, one can access cloud storage.
MAS pointed out that businesses providing services for digital payment tokens and capital market product tokens have a high risk of money laundering, and if activities are conducted outside of Singapore, it cannot effectively supervise such companies.
Therefore, companies that provide services only outside the country must cease their activities if they do not have a license.
In Singapore, for example, the cryptocurrency exchange WazirX was headquartered in the country while primarily providing services to the Indian market. One of the backgrounds of the new rules is that WazirX's parent company Zettai has decided to change its brand name to Zensui and relocate to Panama in Central America.
WazirX experienced a theft of over $300 million (approximately 43.5 billion yen) due to hacking in July last year. A reconstruction plan for the resumption of business had been submitted to the Singapore High Court, but the court rejected it this month. The outlook for continuing operations in Singapore has become uncertain.
Purchases of virtual currencies with credit cards are also prohibited
MAS has strengthened regulations on cryptocurrencies following the collapse of FTX in 2022. It has prohibited the purchase of cryptocurrencies using credit cards and has also restricted promotional incentives.
Additionally, new regulations have been introduced for digital payment token (DPT) service providers to protect individual investors. For example, there are requirements for the segregation of customer assets, conducting daily balance reconciliations, and utilizing third-party institutions for the custody of digital assets.
In addition, strict rules have been added compared to other countries, such as the prohibition of promotions like airdrops, referral bonuses, and sign-up benefits for individual customers, the prohibition of leveraged products, and the implementation of knowledge tests regarding cryptocurrency risks for users.
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The Monetary Authority of Singapore clarifies new regulatory rules for cryptocurrency companies in response to confusion.
On the 6th, the Monetary Authority of Singapore (MAS, equivalent to a central bank) clarified the new rules for cryptocurrency (virtual currency) companies that were previously announced.
At the end of May, MAS announced a series of new regulations. In particular, "Digital Token Service Providers (DTSP)" providing services outside of Singapore are required to obtain a license, and those without a license were notified to cease operations after July 1.
Due to the confusion in the industry regarding the scope of this rule, MAS is emphasizing the range of businesses that are subject to it this time.
It was stated that the new rules apply only to operators that provide services outside of Singapore.
Operators providing services to customers in Singapore are already subject to regulation, and it is stated that this regulation does not affect the operations of companies that have obtained licenses. These operators continued to say that they can still provide services to customers outside of Singapore.
Furthermore, it is emphasized that service providers such as tokens used only as utility tokens or governance tokens are not subject to licensing or regulation and are not affected.
What is a utility token?
A utility token that functions as a right to use specific services. It can be used to pay for goods and meals instead of cash, or by holding it, one can access cloud storage.
MAS pointed out that businesses providing services for digital payment tokens and capital market product tokens have a high risk of money laundering, and if activities are conducted outside of Singapore, it cannot effectively supervise such companies.
Therefore, companies that provide services only outside the country must cease their activities if they do not have a license.
In Singapore, for example, the cryptocurrency exchange WazirX was headquartered in the country while primarily providing services to the Indian market. One of the backgrounds of the new rules is that WazirX's parent company Zettai has decided to change its brand name to Zensui and relocate to Panama in Central America.
WazirX experienced a theft of over $300 million (approximately 43.5 billion yen) due to hacking in July last year. A reconstruction plan for the resumption of business had been submitted to the Singapore High Court, but the court rejected it this month. The outlook for continuing operations in Singapore has become uncertain.
Purchases of virtual currencies with credit cards are also prohibited
MAS has strengthened regulations on cryptocurrencies following the collapse of FTX in 2022. It has prohibited the purchase of cryptocurrencies using credit cards and has also restricted promotional incentives.
Additionally, new regulations have been introduced for digital payment token (DPT) service providers to protect individual investors. For example, there are requirements for the segregation of customer assets, conducting daily balance reconciliations, and utilizing third-party institutions for the custody of digital assets.
In addition, strict rules have been added compared to other countries, such as the prohibition of promotions like airdrops, referral bonuses, and sign-up benefits for individual customers, the prohibition of leveraged products, and the implementation of knowledge tests regarding cryptocurrency risks for users.