The Monetary Authority of Singapore (MAS) has said that some crypto-related activities are unregulated and it would not know the number of companies interested in setting up a crypto firm in the city-state unless they seek a central bank license.
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Firms that provide a service which involves buying, selling or facilitating the exchange of digital payment tokens (DPTs) would be regulated under Singapore's Payment Services Act 2019 (PS Act), said Tharman Shanmugaratnam, senior minister and minister in charge of MAS, in a reply to a Parliamentary question.
The island nation's central bank also cautioned that cryptocurrency transactions involving privacy coins and privacy wallets in Singapore are subject to misuse by criminals as they are designed to hide the identity of persons behind the transactions.
While Singapore aspires to be a crypto hub in Southeast Asia, Tharman acknowledged in his comments that other jurisdictions too are in a situation where some activities related to cryptocurrencies are unregulated.
Many companies related to Singapore have filed bankruptcy or have gone into liquidation over the last few months, such as the Three Arrows Capital hedge fund, the US$40 billion collapse of the Terra-LUNA stablecoin project, while Nasdaq-listed Eqonex Ltd. shut its crypto exchange.
MAS conducts surveillance to identify unlicensed firms that illegally provide DPT services or solicit customers in Singapore, Tharman said.
The central bank also refers matters to the police for investigation when it suspects an applicant is involved in illicit activities, besides rejecting the application, Tharman said.
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