Cryptocurrency Bound By Singapore’s Laws For All Transactions

News, Regulation | January 9, 2018 By:

Singapore’s Deputy Prime Minister Tharman Shanmugaratnam said that the country’s laws do not make any distinction between transactions conducted using fiat currency, cryptocurrency, or other novel ways of transmitting value. Shanmugaratnam is also the minister in charge of the Monetary Authority of Singapore, the country’s central bank.

Shanmugaratnam made the statements while responding to a question from Foo Mee Har, a member of Parliament for West Coast GRC, on how MAS and law enforcement agencies can enforce anti-money laundering and counter terrorism financing (AML/CTF) laws on bitcoin transactions.

Shanmugaratnam said that MAS’ AML/CTF requirements apply to all activities of financial institutions, whether conducted in fiat or cryptocurrencies. The Commercial Affairs Department (CAD) is empowered to investigate and prosecute all manner of money laundering and terrorism financing cases.

“Everyone is required under the law to report suspicious transactions, which they come across in the course of their trade, profession, business or employment, to the Suspicious Transaction Reporting Office in CAD,” he said.

The minister noted that due to cryptocurrency’s anonymous nature, it may be used to conceal illicit movement of funds. He added that the absence of a central clearing house for such transactions makes enforcement challenging, as it is difficult to identify the parties upon which enforcement orders can be applied.

“However, at some stage, fiat currency will have to be exchanged for virtual currency, or vice versa, at intermediaries that buy, sell or exchange virtual currency,” he said. “MAS, therefore, intends to impose AML/CTF requirements on such intermediaries. MAS is currently conducting public consultation on a proposed Payment Services Bill that will empower us to do this.”

In October of last year, MAS managing director Ravi Menon said that the central bank has no plans to regulate cryptocurrencies such as bitcoin, but will remain watchful on potential risks. Menon added that very few jurisdictions regulate cryptocurrencies, per se. Most have taken the approach that the cryptocurrency itself does not pose the risk that warrants regulation.