Singapore and Virtual Assets Regulations

Singapore is well-known for its rigorous enforcement of rules and regulations. Singapore, on the other hand, adopts a balanced approach to cryptocurrency and Bitcoin laws and is dubbed a "Crypto Haven" by many in the sector. The legality of Bitcoin and cryptocurrencies has been securely ingrained in a number of pieces of legislation in Singapore, making cryptocurrency exchange, custody, and other operations legal.

Singapore Cryptocurrency Key Features

• AML/CFT Laws in Singapore are Strict 

• Securities and Futures Act Covers ICOs 

• Financial Service Act Covers Exchanges 

• Cryptocurrency is Legal (As Property, Not Legal Tender) 

• Regulator: Monetary Authority of Singapore

• Capital Gains on Cryptocurrencies are not taxed in Singapore.

Cryptocurrency Regulator in Singapore 

While cryptocurrency is legal in Singapore, and the rules around Bitcoin and other Digital Payment Tokens are thorough and open to innovation, Singapore's cryptocurrency anti-money laundering and counter-terrorism financing laws are strict.

The Payment Services Act (PSA) was passed in Singapore in 2019, with the goal of clarifying the legal status of cryptocurrencies, also known as "Digital Payment Tokens," and how they should be controlled.

The Payment Services Act (PSA) of Singapore governs a wide range of payment service companies, including:

  • Account issuance: Companies give consumers accounts with the express purpose of making payments.
  • Local and international money transfer services: Companies that facilitate cross-border and domestic transactions.
  • E-money issuers: Companies that allow e-money to be issued, kept in e-wallets, transferred, and used to buy goods and services. FIs are often included in this category.
  • Merchant acquisition: refers to firms that accept payments on behalf of other businesses in Singapore.
  • Digital Payment Token Services: Companies that facilitate the exchange of digital payment tokens (DPT) on a platform or the purchase and sale of DPTs.
  • Foreign Exchange (FX): Companies that facilitate the purchase and selling of foreign currency in Singapore.

PSA’s Compliance Requirements

  • SARs: A proper internal mechanism must be in place for operations to transmit SARs to MAS. For AML/CFT inspections, companies must also retain thorough records of users.
  • Tx monitoring: Obligated entities must keep an eye on counterparties to Txs for ML and TF red flags.
  • Screening: Users must be checked against sanctions lists, PEPs, and negative media by obligated entities.
  • Customer Due Diligence (CDD): Obligated companies are required to do KYC (Know-Your-Customer) checks in order to identify and verify their users.

New Law on Cryptocurrency

Under the new legislation, virtual payment companies that allow the transmission, exchange, or storage of cryptocurrencies in Singapore are now subject to the Monetary Authority of Singapore's (MAS) regulatory control. Regardless of whether the providers own the money or cryptocurrencies involved, the new regulatory oversight will apply.

The Monetary Authority of Singapore (MAS) has pushed Virtual Asset Service Providers (VASPs) to function or seek business in the nation to register for a trading license and adhere to AML/CFT rules. The regulatory requirements for VASPs – also known as Digital Payment Token Services Providers (DPTSPs) in the jurisdiction – were first laid out in regulator notice PS-N02 in December 2019 and the Payment Services Act (PSA) in January 2020, but as MAS notes in a new guidance document titled ‘Improving AML/CFT Controls of Digital Payment Token Service Providers,' the regulations have not yet been implemented.


The information is presented in the form of a series of infographics that illustrate why and how Virtual Assets (VAs) must be controlled. The paper emphasizes the increased money laundering and terrorist funding concerns associated with VAs, citing their role in the transportation and concealment of cash produced unlawfully in online frauds during the COVID-19 pandemic. During the epidemic, the amount of VA-related Suspicious Transactions Reports (STRs) submitted with the Financial Intelligence Unit (FIU) increased significantly, including transactions involving fraud, hacking, and ransomware, as well as illicit purchases on Dark Web markets.


The guideline also provides context on the Financial Action Task Force (FATFVA-focused )'s recommendations and the translation of those standards into Singapore's rules and legislation, including the PSA's modification in January 2021 to broaden the coverage on custodial wallets and money transfers.


The advice gives general outlines on the execution of essential aspects of a strong AML/CFT program, including Client Due Diligence (CDD), Know Your Customer (KYC) requirements, monitoring, and STR filing, for companies looking for direct support. Enhanced Due Diligence (EDD) on Politically Exposed Persons (PEPs) attempting to trade in VAs is also emphasized in the advice. 


Overall, MAS's tone on VASPs is light, with the guideline emphasizing the need to "increase industry awareness...of sectoral money laundering and terrorist financing (ML/TF) concerns, and offer extra information to facilitate their adoption of appropriate controls." However, there are clues in the text that a stronger enforcement approach would be implemented in the future. MAS has already identified numerous VASPs that have failed to comply with the requirements to file a request for a license by June 28, 2020, and has taken action against them, including putting business names on the MAS Investor Alert List and referring them to criminal authorities.


Constructive Despite the paper is constructive, which is obviously designed to alert the VASP sector to the necessity to accept the regulatory developments of the previous two years as soon as possible. For those companies that haven't completely grasped the criteria, the advice offers yet another chance to act immediately to identify flexible and cost-effective AML/CFT solutions, which, as the MAS has stated, can increasingly be found through the use of new regulatory technology.

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