Cryptocurrency regulations in Singapore

When MAS first drafted the PS Act, there existed first generation digital tokens like Bitcoin and Ether that were used for payments – these were commonly known as “virtual currencies” or “cryptocurrencies”.

MAS brought these cryptocurrencies within scope of the Payment Services Act by defining a digital payment token (DPT) to be any digital representation of value (other than any excluded digital representation of value) that –

(a) is expressed as a unit;
(b) is not denominated in any currency, and is not pegged by its issuer to any currency;
(c) is, or is intended to be, a medium of exchange accepted by the public, or a section of the public, as a payment for goods or services or for the discharge of a debt;
(d) can be transferred, stored or traded electronically; and
(e) satisfies such other characteristics as the Authority may prescribe.

Entities looking to deal with cryptocurrencies in Singapore are required to apply for a licence under the PS Act. A failure to do so could result in the entity being listed on the Investor Alert List and may also be required to "cease providing payment services which are regulated under the PS Act to Singapore residents and cease soliciting such business from Singapore residents". Such action has been enforced against Binance.com:

"As Binance did not apply for a licence under the PS Act, MAS has listed Binance.com on the Investor Alert List, to warn consumers in Singapore that Binance is not regulated or licensed in Singapore to provide any payment services. Binance is required to cease providing payment services which are regulated under the PS Act to Singapore residents and cease soliciting such business from Singapore residents," the MAS spokesperson said."
Source: Business Times, last revised on 2 Sep 2021

According to Parliamentary Replies
last revised on 13 Sep 2021

Being a regulated entity also promotes consumer confidence as "... consumers [who] choose to invest in or trade cryptocurrencies ... are advised to check if the entities they deal with are regulated by MAS. Regulated entities have to comply with anti-money laundering and terrorism financing requirements, which means that they would have to put in place measures, such as performing customer due diligence and transaction monitoring, to reduce the risk of illicit actors transacting through them. Regulated entities are also required to put in place security measures to guard against cyber attacks. These entities would have to report any suspicious transactions to the Police.

The public may refer to the following resources found on MAS’s website:

(a) The Financial Institutions Directory – a list of financial institutions regulated by MAS and the activities they are authorised to provide;

(b) The Register of Representatives – a list of individuals who conduct activities regulated by MAS; and

(c) The Investor Alert List – a list of unregulated entities who, based on the information received by MAS, may have been wrongly perceived as being licensed or authorised by MAS."