Singapore Cryptocurrency Regulations

Is Cryptocurrency Legal In Singapore?

• Cryptocurrencies: Not legal tender
• Cryptocurrency exchanges: Legal, registration with the Monetary Authority of Singapore required

In Singapore, cryptocurrency exchanges and trading are legal and the city-state has taken a friendlier position on the issue than some of its regional neighbors. Although Singapore’s cryptocurrency rules mean that digital payments tokens (DPT) are not yet considered legal tender, Singapore’s tax authority treats Bitcoins as “goods” and so applies Goods and Services Tax (Singapore’s version of Value Added Tax). 

The Monetary Authority of Singapore (MAS) has adopted a neutral position on the growth of cryptocurrencies. In 2017 it clarified that, while it would not seek to regulate virtual currencies, it would regulate DPT if they were classified as “securities”. Although it has taken an even-handed approach to date, in 2020 MAS issued warnings to the public of the risks of investing in cryptocurrency products. 

Singapore Cryptocurrency Exchange Regulations

MAS’ pragmatic approach to Singapore cryptocurrency exchange regulation has seen it apply existing legal frameworks where possible. In January 2018, MAS issued a press release warning the public of the risks of speculating with cryptocurrency, while Deputy Prime Minister Tharman Shanmugaratnam stated that cryptocurrencies are subject to the same AML and CFT measures as traditional fiat currencies. A year later, the Payment Services Act 2019 (PSA) was passed, bringing exchanges and other cryptocurrency businesses under the regulatory authority of MAS from January 2020 and requiring them to obtain a MAS operating license. 

In January 2021, MAS amended the PSA to reflect changes in international AML standards and in the sophistication of criminal money laundering methodologies. The amendments broadened the scope of the PSA to include the transfer of cryptocurrencies and custodial wallets service providers. Under the amendments, MAS also now has greater regulatory powers over Singapore’s cryptocurrency service providers and can, for example, require them to safekeep customer assets. 

In January 2022, MAS issued guidelines intended to curb the promotion of cryptocurrency services to the public. The guidelines advised that crypto firms should remove their advertisements from public transport, websites, social media platforms, and broadcast and print media. MAS advised that cryptocurrency advertisements could continue in corporate contexts. 

In March 2022, MAS issued Notice PSN02 which set out “requirements for digital payment token service providers on anti-money laundering and countering the financing of terrorism”. The requirements included new risk assessment and risk mitigation measures, new customer due diligence measures, and reporting and record-keeping obligations. 

Cryptocurrencies that constitute capital market products are regulated under Singapore’s Securities and Futures Act (SFA). The SFA imposes certain reporting and record-keeping obligations on cryptocurrencies that are issued in public offerings, including a requirement to prepare a prospectus for potential buyers. In 2020, the MAS Omnibus Act expanded the regulatory scope of the SFA. 

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Future Cryptocurrency Regulations

With the PSA in effect, cryptocurrency regulations in Singapore are broadly aligned with Financial Action Task Force (FATF) guidance – but MAS is working to achieve further alignment and consolidation. New regulations will likely involve stronger AML/CFT standards for cryptocurrency service providers, and introduce more robust technology risk management requirements for financial institutions. 

Singapore’s recent efforts to regulate cryptocurrencies and cryptocurrency services have attracted attention from international crypto-space businesses. Following China’s 2021 crackdown on cryptocurrency businesses, for example, many high-profile Chinese crypto firms, such as ByBit, Huobi, Cobo, and OKCoin, migrated to Singapore. 

In April 2022, following the move to reduce cryptocurrency promotion, Singapore’s parliament continued its consideration of the Financial Services and Markets Bill which includes measures to expand MAS’ ability to address cryptocurrency money laundering. Under the new rules, cryptocurrency firms that are created in Singapore but that provide their services overseas will need to register with MAS and obtain an operating license. The legislation reflects Singapore’s intention to enhance its global reputation as a safe destination for cryptocurrency services. You can find out more about the implications of the legislation for crypto firms in our blog.