The Monetary Authority of Singapore has released a guide for businesses that want to make money through an ICOs in the city-state. The document also lists eleven possible types of token, all with different obligations.
The newly improved draft follows up to the announcement to bring about a “New Payments Framework” lined in the original document. The document explains the position of the Singapore central bank on how necessary it is for certain intermediaries to comply with its applicable securities laws based on Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT) policies.
These intermediaries primarily include almost every participant that is involved in ICO asset-related activities as well as entities that produce the tokens to those who facilitate their trading on their online platforms. It also includes those who offer financial consultation regarding these tokens, hence, almost everybody is subjected to the law.
Meanwhile, an ICO issuer in Singapore, for instance, is mandated to obtain capital markets services license while financial advisers are required to secure a financial advisory license from the FAA. In addition, a digital asset exchange is required to be recognized and approved by the MAS. This includes those providing financial advice to Singaporeans from abroad.
According to the "New Payments Framework," all the intermediaries mentioned above are liable to “taking proper steps towards identifying, assessing and understanding their terrorism financing (ML/TF) and money laundering risks.”
The updated guidelines clarify that the intermediaries are ordered to develop and implement specific internal policies under appropriate MAS notices that would permit the central bank to monitor the transactions of customers, alongside financial records, per the law.
The guidelines introduced by the MAS says that even if a token is not considered a security, it is necessary to obtain a license to determine its compliance with the CFT/AML acts. This means that they are required to report suspicious activities to the police.
Nevertheless, these intermediaries would be considered to be illegal if they are found doing business with individuals or group of people branded as terrorists by the United Nations and the intelligence agencies in Singapore.
Eleven types of cryptocurrencies and their various obligations
The remaining part of the document features the eleven types of cryptocurrencies leading to a number of possible variations of the legal outcome. For instance, if a token is to be used to buy services on a blockchain and nothing more, it will not be considered as a digital payment token.
Also, if a token is utilized as a digital representation of a share, there is a long list of legal demands that must be met in order to operate legally in Singapore. Nevertheless, if that same firm makes its token only available in other countries, many of these laws will not be applicable. However, it may then be considered a “fund manager” and a specific license will be required for that.
MAS Introduces a New PSB
While Singapore has recently hosted a major international cryptocurrency conference it does not consider digital currency to be legal tender but has accepted its inevitability. Back in November, the MAS introduced a new Payment Services Bill (PSB) in the nation's parliament.
This brings digital currency under the laws mentioned for domestic and international money transfers and foreign exchange transactions. The modified securities draft also includes the PSB as an enabler of AML/CFT acts inside the ICO space. The excerpt reads as follow:
“A person carrying on a business of providing any service of dealing in digital payment tokens or any service of facilitating the exchange of digital payment tokens must be licensed and will be regulated under the PSB for AML/CFT purposes only and will be required to put in place policies, procedures and controls to address its AML/TF risks.”
Think we missed something? Let us know in the comments section below.