The Monetary Authority of Singapore (MAS) clarified its Digital Token Service Provider (DTSP) regime, amid industry panic over a potential ban on crypto companies serving overseas customers.
In the announcement on June 6, MAS reiterated that cryptocurrency companies providing digital payment tokens and capital market product tokens for overseas markets need to obtain a license starting June 30.
However, the regulator warned that licenses will only be issued in "extremely limited circumstances." MAS stated that due to the difficulty in supervising offshore companies and money laundering risks, licenses will not be issued easily.
MAS emphasized that companies unable to obtain a license due to ineffective supervision must "cease their regulated activities."
Related: UK's FCA plans to lift ban on retail investor crypto ETNs
Is the crypto market starting to tremble?
As MAS set June 30 as the deadline for local crypto service providers to cease serving overseas markets, the crypto market experienced some volatility. Indian service but Singapore-headquartered crypto exchange WazirX announced shortly after MAS's deadline that it would relocate its business to Panama.
When MGMAS issued the announcement, Hagen Rooke, a partner at Gibson, Dunn & Crutcher, stated that licenses would only be issued in rare circumstances.
"MAS will issue licenses under the new framework only in very few cases (as such operational models typically raise regulatory concerns, such as anti-money laundering/combating the financing of terrorism issues)."
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Singapore Tightens Crypto Control
The latest actions by Singapore's regulators indicate that local authorities intend to maintain stricter control over the local crypto industry. Today's announcement clarified that cryptocurrency companies serving local customers "are already regulated," thus the new regulations apply only to companies serving overseas customers. However, MAS also pointed out that not all crypto-related services are affected:
"Service providers related to other tokens, such as those that serve merely as utility and governance tokens, are not subject to licensing or regulation under the new regime and are therefore unaffected."
Singapore's regulatory changes are based on a report from May showing that digital assets are quite popular in the country. Crypto awareness in Singapore has reached an all-time high, with 94% of respondents in a recent survey indicating familiarity with at least one digital asset.
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