Nature of Crypto Payment Gateways

As a crypto payment gateway, what are the risks that fall under the ambit of MAS regulation?

To mitigate money laundering risks, crypto companies, otherwise known as Virtual Asset Service Providers (VASPs), are to adhere to "Travel Rule" that refers to Financial Action Task Force (FATF) Recommendation #16.

Source: sumsub, last revised on 16 December 2020

"The Monetary Authority of Singapore (MAS) implemented the crypto travel rule in Singapore through Notice PSN02 Prevention of Money Laundering and Countering the Financing of Terrorism – Digital Payment Token Service, published on December 5, 2019, and in effect since January 28, 2020."

"Notice PSN02 requires VASPs to implement the travel rule for all transaction sizes, although wider PII sharing requirements apply to transfers of value above SGD 1,500." This means gathering Personally Identifiable Information (PII) such as names and account numbers of both senders and recipients.

Source: Notabene, last revised on 28 Jan 2020

"There are some specific requirements for data gathered on senders in particular. This includes additionally collecting either their physical address, unique ID number (national identity number, etc.), customer identification number, or date and place of birth."

"The Travel Rule also requires crypto platforms to share sender and recipient data with each other during transactions. That is why this regulation is called the “Travel Rule,” because the personal data of the transacting parties ‘travels’ along with their transfers."

Source: sumsub, last revised on 16 December 2020

FinReg business tip

Payment gateways facilitating cryptocurrency transactions are likely to fall under the ambit of MAS anti-money laundering measures, such as the Travel Rule.