The Monetary Authority of Singapore (MAS) has said that cryptocurrency exchanges licensed to operate in Singapore must comply with financial sanctions against Russia.
This comes after pro-Russian groups raised millions of dollars in crypto donations to support Moscow’s war on Ukraine.
In March 2022, following the Russian invasion of Ukraine, MAS introduced financial measures targeting identified Russian banks, entities, and activities in Russia, as well as fundraising activities benefiting the Russian government.
“These measures apply to all financial institutions in Singapore, including Digital Payment Token Service Providers (DPTSP) licensed to operate in Singapore,” Maas said, citing Channel News Asia, Thursday (24/11/2022).
MAS did not say whether it had received reports of exchanges operating in Singapore being used to donate cryptocurrency to pro-Russian groups, but stressed the need for DPTSP to have strong controls in place to avoid dealings with sanctioned banks and prohibited activities.
“For example, DPTSP must conduct customer due diligence to identify and verify the identity of their customers and beneficial owners of a customer, and screen their customers and transaction partners,” said a MAS spokesperson.
Singapore welcomes the adoption of cryptocurrencies as they play a supportive role in the broader digital asset ecosystem, but has tightened regulations after calling trading in these assets “extremely risky”.
In October, MAS suggested that retail investors in Singapore undergo a risk awareness assessment before being allowed to trade cryptocurrencies. They also will not be able to use credit cards or any form of loan to trade cryptocurrencies.
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Previously, the Singapore government’s data on cryptocurrency fraud revealed that the number of cryptocurrency fraud reports received by the police in the past three years has continued to increase.
Home Minister and Justice Minister K. Shanmugam revealed that in 2019, the police received 125 reports of cryptocurrency fraud. This rises to 397 in 2020, and 631 in 2021.
“Most cryptocurrency scams are carried out by scammers based outside of Singapore. As such, there is a limit to how much law enforcement agencies in Singapore can do,” Shanmugam, quoted in Bitcoin.com, said Monday (31/10). /2022).
Shanmgham explained that the ability to solve the case will depend on the level of cooperation from law enforcement agencies abroad, as well as their ability to track down these fraudsters. However, Singapore will continue to step up investigation efforts.
Singapore police set up a cryptocurrency task force in 2018 to monitor the cryptocurrency landscape.
This is done to develop and improve operational procedures in the investigation and capture of cryptocurrency, and to establish working relationships with overseas law enforcement agencies, industry professionals, and academic experts.
The task force works closely with the Monetary Authority of Singapore (MAS), the country’s central bank, which regulates entities that deal with or facilitate cryptocurrency exchanges.
However, the best defense is a smart audience. To this end, we have stepped up our public education efforts to educate the public about cryptocurrency-related scams.”
Previously, the Monetary Authority of Singapore (MAS) proposed a tougher regulatory draft, aimed at restricting cryptocurrency trading to retail investors with the aim of reducing risks to consumers, while promoting the development of stablecoins.
The proposed steps are detailed in two advisory papers published by the Commission. The plan is to present the new rules as guidelines before finally incorporating them into the Payment Services Act.
“Trading in cryptocurrencies is extremely risky and not suitable for the general public,” the MAS statement, quoted from Bitcoin.com, said on Friday (10/28/2022).
In an announcement on Wednesday, the monetary authority clarified that the proposal covers three key areas of consumer access, business conduct, and technical risk. It aims to reduce the risk of speculative trading by making certain commitments to crypto service providers.
These companies must ensure that their clients make the right decisions by providing disclosure of risks, including price fluctuations and cyber threats. The central bank suggested that individual investors should not be allowed or offered the option of paying by credit.
Cryptocurrency platforms will also be required to keep customers’ assets separate from their own funds and may be prohibited from lending investors’ assets to third parties. However, regardless of these actions, users will ultimately still be responsible for their own decisions and actions.
Exalting the potential of well-regulated and securely backed stablecoins to facilitate transactions in the digital asset space, MAS indicated that it plans to expand its regulatory framework to ensure stability.
It will focus on issuing stablecoins pegged to a single currency with a circulation of more than S$5 million.
Under the proposed rules, issuers would be required to hold reserves of assets equal to at least 100 percent of the currency’s face value, which can only be pegged to the Singapore dollar or G10 currencies.
They must publish white papers, meet authorized capital requirements, and maintain liquid assets. Local banks will be allowed to issue stablecoins.
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