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Asia-Pacific, Crypto, Financial Services

Singapore considers new AML laws to tighten country’s oversight of virtual asset movement

By Dan Byrne for AMLi

SINGAPORE is to consider a range of new laws designed to bring the city-state closer to international AML standards.

The parliament of the southeast Asian economic powerhouse has been presented with a bill to amend existing laws, with a specific focus on the handling and transfer of digital currency through virtual asset service providers (VASPs).

Under the proposed regulations, which are intended to align the city-state with standards set by the Financial Action Task Force (FATF) last year, regulations will be expanded to cover further risks associated with virtual assets like bitcoin.

“The speed, anonymity and cross-border nature of VASP activities make them inherently more vulnerable to ML/TF risks,” the Monetary Authority of Singapore (MAS) said in a statement Monday.

“MAS has consulted the industry and public in December 2019 on the policy changes. Respondents were generally supportive of the proposals, and MAS has incorporated the feedback into the Bill where appropriate.”

The new laws are intended to apply current regulations to the ever-lengthening list of virtual-asset entities which are relevant under worldwide standards.

They would expand the definition of VASP in Singapore to include any entity which provides custodian wallet services for virtual assets, or facilitates exchanges of virtual assets – even if it may doesn’t hold those assets at any point in the transaction.  

They would also redefine the term, ‘cross-border money transfers service’ to include entities facilitating transactions where Singapore is neither the origin nor destination of the transferred funds.

Additionally, MAS would be given further powers to impose measures on VASP for issues concerning asset protection or public interest. This would take MAS beyond its current primary capacity as a regulator with AML focus.

Singapore is one of several countries recently highlighted as ‘in need of improvement’ in the area of virtual asset service providers.

Recent research from Blockchain analytics and cryptocurrency intelligence firm CipherTrace said that the tiny nation had some of the highest numbers of VASPs with know-your-customer (KYC) deficiencies in the world, alongside the UK and United States.

This was, however, offset by the equally large number of complainant entities which served to give the nation an overall ‘mid-range’ rating as opposed to an overall ‘weak’ one.

The amount of VASPs based in Singapore, as well as their evolving nature has been cited by MAS as a factor behind the new proposed regulations.

The bill was introduced for a first reading in the Singaporean Parliament by a Minister for Transport Ong Ye Kung Monday. He spoke on behalf of MAS chairman and former deputy Prime Minister Tharman Shanmugaratnam 

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