Accepting crypto payments

Your business description

Centralised crypto exchange with decentralised settlement. Looking to issue our own utility token and apply for Payment Service licence.

How does MAS regulate businesses accepting crypto payments?

Cryptocurrencies are known as "digital payment tokens" in Singapore. Businesses accepting crypto payments are considered as "digital payment token transfer service".

Source: Comply Advantage

According to MAS (Notices)
last revised on 1 March 2022

'digital payment token transfer service' means the service of accepting digital payment token from one digital payment token address or account, whether in Singapore or outside Singapore, as principal or agent, for the purposes of transferring, or arranging for the transfer of, the digital payment token to another digital payment token address or account, whether in Singapore or outside Singapore

"MAS currently regulates service providers which deal with the exchange of cryptocurrencies when they possess the money or cryptocurrency.

Under the amendment, the authority's powers are expanded to include regulatory measures on such providers even if they may not posses the money or cryptocurrency involved."

It is worth to note that regulation even applies to cross-border money transfers where moneys do not flow through Singapore.

"'The Bill will broaden the definition of cross-border money transfer service to include facilitating transfers of money between persons in different jurisdictions, where money is not accepted or received by the service provider in Singapore,' said Mr Ong in Parliament."

Source: CNA, last revised on 4 Jan 2021

Are businesses that accept crypto payments considered as Virtual Asset Service Provider (VASP)?

"A VASP is defined by the Financial Action Task Force (FATF) as a business that conducts one or more of the following actions on behalf of its clients:

  • exchange between virtual assets and fiat currencies;
  • exchange between one or more forms of virtual assets;
  • transfer of virtual assets;
  • safekeeping and/or administration or virtual assets or instruments enabling control over virtual assets;
  • participating in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset;

This definition encompasses a range of crypto businesses, including exchanges, ATM operators, wallet custodians, and hedge funds. FATF further recommends that VASPs be subject to the same stringent AML/CTF and KYC requirements as traditional financial institutions."

Source: bitFlyer