This is one of the most “friendly” digital money jurisdictions in the world, whose national regulator (MAS) consistently improves the rules and issues clarifications regarding cryptocurrency exchange licenses.
Cryptocurrency regulation in Singapore
The peculiarity of the country’s legislation is that permits are issued only to exchanges that list on the platform tokens equated to securities. If the exchanger is not engaged in their purchase and sale, a license for cryptocurrency is not issued. Tokens are equal in “rights” with the Central Bank if they represent access to the control of a business or its profits (like shares) or certify the existence of an obligation to the holder, like debt loans.
Mining is not regulated under the current legislation, but it is not forbidden by it either. It should be noted that mining costs in this jurisdiction are significantly higher than average.
Despite the limited field of licensing, Singapore is actively improving financial legislation in the field of regulating operations with cryptocurrencies. So even a company that is not associated with securities should take steps to legalize its position and cooperate with MAS, following its instructions.
Compliance basics
Cryptocurrency exchange license in Singapore, as well as its further use, obliges the cryptocompany to follow several mandatory requirements of legislation in the field of compliance, inter alia:
- develop internal policies for working with crypto assets;
- assess the risks that are associated with the operations under consideration, as well as develop measures to reduce such risks;
- appoint persons authorized to comply with the norms of the relevant legislation;
- constantly monitor operations with crypto assets;
- keep a detailed record of all transactions;
- request and store data about customers of the cryptocompany;
- report on your activities regularly;
- identify suspicious transactions and conduct thorough inspections regarding them;
- inform the regulatory authorities about cases of transactions that demonstrate a reasonable risk of illegal laundering money and financing of terrorism;
- educate employees who work with crypto assets.
This is an approximate list of actions that any company should take to prevent money laundering and terrorist financing from working with crypto assets. “Prifinans” lawyers will be happy to advise you in more detail on the issue, develop a specific action plan and the required documents to fulfill compliance requirements.
Requirements for crypto exchanges
To work in the legal field of jurisdiction, it is necessary to create a company in Singapore. It is cheaper than, for example, registration in Switzerland, there are no stringent requirements for the authorized capital, it is enough to issue at least one share to get started. An indispensable condition is an office in the jurisdiction and the hiring of one resident or citizen to the board of directors. The company secretary must also be local.
Cryptocurrency exchange license in Singapore when operating with Central Bank tokens is issued if the exchange has proven that it:
- created a system for controlling risks associated with the cryptocurrencies exchange;
- follows the rules of transparent and legal trading;
- provided sufficient resources to work – financial, technical, human;
- protected the confidentiality of customer information and the safety of funds on the platform;
- has the ability to keep records of each transaction;
- created a board of directors and committees for pay, audit, appointments and conflict resolution;
- meets the criteria of AML, CFT and other international standards.
Cryptocurrency license for transactions not related to securities is unlikely to be radically different according to the requirements. Therefore, in order to develop a legal and successful business, it is necessary to take care of organizational, technical and legal support.
How “Prifinance” lawyers can help
“Prifinance” lawyers are ready to consider each case of working with crypto assets and develop individual solutions. The lawyers will create an individual strategy for obtaining a cryptocurrency exchange license in Singapore by assuming the collection of necessary information, preparation of documents, opening a local company and bank account, as well as direct communication with local partners and regulators. Experts will advise on all the nuances of doing business in this jurisdiction abroad.
