Key Cryptocurrency Regulations in Singapore
Singapore, a prominent global financial center, has developed a comprehensive regulatory framework to manage the dynamic cryptocurrency sector. The country ranks 9th in the world for its crypto-friendly environment. Below are some of the most significant cryptocurrency regulations in Singapore:
Payment Services Act (PSA)
The PSA serves as the foundation of Singapore’s cryptocurrency regulations, focusing on digital payment tokens (DPTs). It requires businesses to obtain licenses for various activities, such as operating exchanges, trading DPTs, and offering wallet services.
The PSA introduces a dual-license structure—standard and major—based on transaction volumes, ensuring appropriate regulatory oversight for different business scales. Additionally, the PSA exempts specific types of DPTs, including loyalty points and in-game assets, recognizing the variety of digital tokens.
Securities and Futures Act (SFA)
In parallel with the PSA, the SFA regulates DPTs that function similarly to traditional financial products, such as securities or derivatives.
When DPTs resemble financial instruments, the SFA mandates licensing for activities involving their trading, offering, or underwriting.
This approach reflects Singapore’s aim to align crypto activities with established financial market standards, ensuring that digital assets with characteristics similar to securities comply with the relevant regulatory frameworks.
Commodity Trading Act
The Commodity Trading Act extends Singapore’s cryptocurrency regulations to asset-backed DPTs.
This legislation specifically applies to DPTs that are tied to physical assets, treating them as commodities for trading purposes. Companies involved in trading such tokens must secure licenses for these activities.
This regulatory measure highlights Singapore’s proactive stance in regulating the diverse spectrum of cryptocurrencies, ensuring that even asset-backed tokens are subject to comprehensive oversight under the Commodity Trading Act.
Process for Acquiring a Cryptocurrency Exchange License in Singapore
Singapore has positioned itself as a leading fintech and cryptocurrency hub by enforcing a well-structured regulatory framework. Any company planning to run a cryptocurrency exchange in Singapore must obtain a license to ensure compliance with local regulations.
The Payment Services Act (PSA) of 2019 governs crypto exchanges, with the Monetary Authority of Singapore (MAS) overseeing security, transparency, and consumer protection standards. Below is a step-by-step guide to securing a cryptocurrency exchange license in Singapore.
1. Identify the Required License Category
Companies providing digital payment token services must apply for one of the following licenses based on their transaction volume and business model:
- Standard Payment Institution License – Suitable for businesses with lower transaction volumes.
- Major Payment Institution License – Required for entities handling large-scale transactions.
2. Compile the Necessary Documentation
Applicants must prepare a detailed business plan along with supporting documents to demonstrate compliance with MAS regulations. Essential requirements include:
- A detailed business model outlining the company’s services and operations.
- Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) policies to ensure compliance with regulatory standards.
- Customer asset protection measures, detailing how funds and data will be secured.
- Profiles of key management personnel, including their qualifications, roles, and expertise.
3. Submit the Application Online
Applications must be lodged through the MAS online portal, with all required documents attached. A well-prepared application increases the chances of a smooth approval process.
4. Communicate with MAS during Review
Once the application is submitted, MAS may request further information or schedule meetings to discuss specific details. Engaging proactively with MAS helps address any concerns and expedites the licensing process.
How ABM Global Assists with the Crypto Licensing Process in Singapore
Navigating Singapore’s stringent regulatory framework for cryptocurrency exchanges can be complex. ABM Global provides end-to-end support to businesses seeking a cryptocurrency exchange license, ensuring full compliance with the Monetary Authority of Singapore (MAS) and the Payment Services Act (PSA) of 2019. Our expertise simplifies the licensing journey, allowing businesses to focus on growth while we handle regulatory requirements.
1. License Consultation and Eligibility Assessment
ABM Global helps businesses determine the appropriate license type based on their operational model, transaction volume, and compliance obligations. We assess whether a Standard Payment Institution License or a Major Payment Institution License is required, ensuring the right regulatory fit.
2. Business Structuring and Compliance Readiness
We guide companies through structuring their operations to align with MAS regulations. Our services include:
- Developing a compliance framework tailored to MAS guidelines.
- Formulating Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) policies.
- Implementing cybersecurity measures for customer data protection.
- Preparing risk management strategies to ensure regulatory adherence.
3. Preparation and Submission of Licensing Application
ABM Global manages the entire application process, ensuring all required documents are accurately prepared and submitted via the MAS online portal. Our team assists with:
- Drafting a comprehensive business plan with operational and financial details.
- Compiling management team credentials and internal control policies.
- Ensuring client fund safeguarding measures are properly documented.
4. Liaising with MAS and Regulatory Authorities
Once the application is submitted, we facilitate ongoing communication with MAS, addressing any additional queries or compliance clarifications. Our proactive engagement helps businesses navigate regulatory scrutiny smoothly.
5. Post-Licensing Compliance Support
After obtaining the license, ABM Global continues to assist businesses with ongoing compliance, ensuring long-term adherence to Singapore’s financial regulations.
ABM Global’s Ongoing Compliance Services for Crypto License Holders in Singapore
Obtaining a cryptocurrency exchange license in Singapore is just the first step. To remain compliant with Monetary Authority of Singapore (MAS) regulations, licensed businesses must continuously monitor, update, and adhere to various compliance requirements. ABM Global offers a full range of ongoing compliance services, helping crypto exchanges maintain regulatory integrity while focusing on business growth.
Continuous AML/CFT Compliance Management
Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations are constantly evolving. Crypto exchanges must implement robust AML/CFT policies to detect and prevent illicit financial activities. ABM Global provides:
Risk-Based AML/CFT Policy Updates
- Regularly review and update AML/CFT policies in line with MAS guidelines.
- Ensure all compliance frameworks align with international standards such as FATF (Financial Action Task Force) recommendations.
- Introduce enhanced due diligence (EDD) measures for high-risk transactions and customers.
KYC & KYB Implementation
- Ensure all Know Your Customer (KYC) procedures meet regulatory requirements.
- Conduct Know Your Business (KYB) verification for corporate clients to assess ownership structures and risk levels.
- Integrate advanced identity verification solutions for customer onboarding.
Ongoing Transaction Monitoring
- Implement automated transaction monitoring systems to detect suspicious activities.
- Review transaction patterns to identify red flags such as structuring, layering, and rapid movement of funds.
- Ensure proper documentation and escalation of suspicious transactions for Suspicious Transaction Reports (STRs) submission.
Regulatory Reporting and MAS Filings
Licensed crypto exchanges in Singapore must comply with regular reporting requirements to maintain transparency and accountability. ABM Global ensures timely and accurate submission of reports to MAS, including:
Financial Reporting
- Preparation and submission of audited financial statements, ensuring full compliance with MAS requirements.
- Monthly and quarterly transaction volume reports to monitor the scale of operations.
- Real-time tracking of capital adequacy ratios, ensuring sufficient liquidity and reserves.
AML/CFT Compliance Reports
- Preparation of AML/CFT risk assessment reports for MAS submission.
- Documentation of compliance improvements and new policies adopted.
- Reporting of any high-risk customer activities or transactions flagged for review.
Transaction and Incident Reporting
- Submission of Suspicious Transaction Reports (STRs) in case of suspected money laundering activities.
- Regular updates on compliance enhancements, corrective actions, and regulatory changes.
3. Employee Training and Compliance Awareness
A well-trained compliance team is critical for ensuring that businesses adhere to MAS regulations. ABM Global offers customized training programs to keep employees updated on compliance best practices.
Regular AML/CFT Training Sessions
- Conduct workshops on identifying and mitigating money laundering risks.
- Provide case study-based training to improve practical understanding of AML/CFT enforcement.
- Train staff on red flag detection for suspicious transactions.
Regulatory Compliance Workshops
- Ensure staff are well-versed in MAS regulatory updates and new compliance requirements.
- Offer scenario-based compliance simulations to improve decision-making in high-risk situations.
- Train compliance officers on regulatory reporting procedures and MAS engagement.
4. Employee Training & Compliance Awareness
- Customized AML/CFT training sessions for compliance teams and key staff.
- Workshops on identifying fraudulent activities and regulatory best practices.
- Scenario-based exercises to enhance compliance decision-making.
AML/CFT Compliance Reports
- Preparation of AML/CFT risk assessment reports for MAS submission.
- Documentation of compliance improvements and new policies adopted.
- Reporting of any high-risk customer activities or transactions flagged for review.
Transaction and Incident Reporting
- Submission of Suspicious Transaction Reports (STRs) in case of suspected money laundering activities.
- Regular updates on compliance enhancements, corrective actions, and regulatory changes.
Why Choose ABM Global for Compliance Support?
ABM Global simplifies the compliance process for crypto exchange operators in Singapore, ensuring they remain compliant with MAS regulations at all times. Our expertise helps businesses:
- Stay ahead of evolving regulations with proactive policy updates.
- Minimize regulatory risks through accurate reporting and monitoring.
- Protect client assets with world-class security measures.
- Maintain regulatory approval with ongoing MAS compliance support.
By partnering with ABM Global, cryptocurrency businesses can focus on growth, innovation, and market expansion while we handle their regulatory obligations with precision and expertise.