Unfriendly crypto regulations in Singapore: Over 100 companies denied licenses
Singapore is famously known for its stringent laws and regulations. Recently, it has become a global center in technology, including cryptocurrency and blockchain. In fact, it has been nicknamed ‘cryptocurrency haven’.
Synchronously, Singapore’s financial regulatory body, the Monetary Authority of Singapore (MAS), is actively taking major steps in regulating the crypto business in the country.
The tough regulations are primarily meant to save the investors and protect the government against proliferation financing, terrorist financing, and money laundering.
The new cryptocurrency regulation and licensing regime were brought into practice by the adoption of the Payment Services Act in January 2020.
Following the passage of this act, over 170 companies applied for licenses seeking to offer digital payment token services, including cryptocurrency, in Singapore.
Crypto merchants find Singapore not so friendly
Unfortunately, according to the world’s largest financial newspaper, Nikkei Asia, over 100 of these companies have been denied licenses, and others have withdrawn their applications.
Before the introduction of the regulation and licensing regime, companies that were in operation were allowed to continue operating until their licenses were approved.
Senior Minister, Mr.Tharman Shanmugaratnam, informed the parliament that approximately 90 companies had been exempted and were still operating.
In early September 2021, the Monetary Authority of Singapore instructed Binance, the largest global cryptocurrency exchange, to halt its services in the country. In addition, on Monday 13th, 2021, Singapore’s Binance affiliate announced it was withdrawing its license application and would shut down its digital trading platform in the crypto haven city-state.
Binance Singapore stated that the buying and selling of existing crypto assets will be stopped from January 22nd, 2022.
Through a tweet, Binance’s CEO Changpeng Zhao claimed that Singapore had made his application redundant. Yet, he had invested an 18% stake in a regulated private securities exchange — Hg Exchange (HGX).
In contrast, Bloomberg reported that Binance Singapore did not meet the license approval requirements to operate cryptocurrency.
Thus far, only three companies have been licensed to provide digital payment services in the city-state. These three entities include; DBS Vickers Securities — a subsidiary of DBS Bank, FOMO Pay — an emerging Singapore-based fintech company, and Independent Reserve of Australia — the first and only licensed cryptocurrency exchange in Australia.
What is the future of cryptocurrencies?
While scores of companies fail to obtain licenses from the country’s crypto regulator, a MAS spokesman said it is forward-thinking and strives to be the world’s crypto hub.
Although more companies are still operating under exemptions, they face an uncertain future amid a darkening mood regarding the future of digital currency in the country.
Digital payment token service providers must comply with requirements, including monitoring and reporting suspicious transactions, proper customer analysis, and regular account reviews.
With Binance closing its trading platform and several other companies uncertain of their operations, is Singapore still the future of cryptocurrency?