New “Code of Practice” Bolsters Cryptocurrency Regulation in Singapore
The Association of Cryptocurrency Enterprises and Start-ups, Singapore (ACCESS) together with the Monetary Authority of Singapore (MAS) developed a new ‘Code of Practice’ to set standards of good practice regarding Anti-Money Laundering (AML) and countering the financing of terrorism measures for crypto-related businesses. This according to news published by The Global Legal Post, August 19, 2019.
In Singapore, the MAS supported the drawing up of a new “Code of Practice” developed by ACCESS which aims to enforce AML procedures and fight the financing of terrorism through cryptocurrencies. These newly established standards come shortly after ACCESS had sought feedback from the public on their proposed guidelines.
The code is a part of ACCESS’s Standardisation of Practice in Crypto Entities (SPICE) initiative and completes the Singapore’s Payment Services Act 2019 (PS Act) which officially brought cryptocurrencies dealing or exchange services under the supervision of the MAS, on January 14, 2019. SPICE aims to develop real guidelines in collaboration with exchanges in order to facilitate the development of the sector and make Singapore a true fintech hub.
The guidelines will focus on several key elements, including AML and KYC best practices, which will allow operators to create robust procedures to reduce money laundering and terrorist financing.
Peiying Chua from Linklaters, the law firm in charge to supervise the implementation of this regulation, is very honored to contribute to this project and thinks that it will further confirm Singapore’s reputation as a leading jurisdiction in the blockchain and fintech space.
The Legal Framework in Singapore
The city-state has taken a friendly position on cryptocurrencies together with its regional neighbors. Although cryptocurrencies are not considered a legal tender, Singapore’s tax authority treats Bitcoins as ‘goods’ and so applies Goods and Services Tax (Singapore’s version of Value Added Tax).
Before this ‘Code of Practice’ the MAS used a relatively soft approach to cryptocurrency exchange regulations, applying existing legal frameworks where possible. The development of this new regulation comes from the need to ensure that cryptocurrencies are not used for money laundering, terrorist financing, or other financial crimes while also contributing to the growth of the companies involved in the space.
Lastly, according to recent news published by the Inland Revenue Authority of Singapore (IRAS) on July 5, Singapore plans to exempt cryptocurrencies that are intended to function as a medium of exchange from Goods and Services Tax (GST) — the local equivalent of Value-Added Tax (VAT) — starting from January 1, 2020.