Singapore will regulate virtual currency intermediaries to address potential money laundering and terrorist financing risks.
The Monetary Authority of Singapore (MAS) will require virtual currency intermediaries that buy, sell or facilitate the exchange of virtual currencies for real currencies to verify the identities of their customers.
They must also report suspicious transactions to the Suspicious Transaction Reporting Office.
The requirements will be similar to those imposed on money changers and remittance businesses who undertake cash transactions.
“Singapore, like most jurisdictions, does not regulate virtual currencies per se, as these are not considered as securities or legal tender,” the monetary authority said in a statement.
The new regulations do not extend to the safety and soundness of virtual currency intermediaries nor the functioning of virtual currency transactions.
The Monetary Authority of Singapore said:
“Investors in virtual currencies will not have the safeguards that investors in securities enjoy under the Securities and Futures Act and the Financial Advisers Act.”
Deputy Managing Director Ong Chong Tee said: “MAS is taking a targeted regulatory approach to virtual currencies to specifically address money laundering and terrorist financing risks. Consumers and businesses should take note of the broader risks that dealing in virtual currencies entails and should exercise the necessary caution.”
He said Singapore will be one of the first countries in the world to regulate virtual currency intermediaries for money laundering and terrorist financing risks.