Singapore authorities announce new guidance to ban overseas services provided by unlicensed cryptocurrency companies.

## Strengthening Cryptocurrency Regulations

On May 30, the Monetary Authority of Singapore (MAS, equivalent to the central bank) announced guidance regarding the business licenses of cryptocurrency service companies.

The measures targeting cryptocurrency companies providing services outside of Singapore are particularly noteworthy this time. The MAS has explained that there will be no transition period of more than a month from the announcement for this response. It has requested cryptocurrency companies without a business license to cease services to foreign countries after July 1, stating that penalties will be imposed for violations of the rules.

This guidance is specifically aimed at "Digital Token Service Providers (DTSP)". A DTSP refers to individuals, joint ventures, or Singaporean companies that provide digital token services and meet either of the following two conditions.

• Operating at the Singapore office
• Incorporated or established in Singapore and providing services outside of Singapore

The purpose of the guidelines is to present the application methods, criteria, and ongoing requirements for obtaining a business license. The MAS has issued several other rules, and it was explained that all guidelines will be regularly updated.

Concerns about virtual coin

MAS explained that the reason for establishing these guidelines is due to the characteristics of services being conducted online and crossing borders, which pose risks such as money laundering, terrorist financing, and the proliferation of finance.

He pointed out that if DTSP is involved in illegal activities, it would also affect trust in Singapore. He explained that business licenses would be granted in a careful and cautious manner, and that consideration for approval would only occur in extremely limited circumstances.

In limited circumstances, MAS cites the following three examples.

• If the applicant has a financially reasonable business model, and if the Monetary Authority of Singapore (MAS) is convinced of the reasons for not providing digital token services in the country despite conducting or establishing business in Singapore (assuming foreign service providers).
• If operated in a manner that does not become a concern for MAS and in accordance with international standards such as the rules of the Financial Action Task Force (FATF)
• If there are no concerns regarding the business structure, such as the ability to comply with regulatory obligations.

What is FATF?

An abbreviation for "Financial Action Task Force," it is an international organization that supervises measures against money laundering (AML) and counter-terrorist financing (CFT). Although the rules and recommendations it presents do not have legal binding force, it has significant influence as it conducts reviews of member countries and publishes a list of non-cooperative countries in AML and CFT.

In addition, the specific conditions to obtain a business license include having executives with sufficient experience in the digital token service industry and maintaining a minimum capital requirement of 250,000 Singapore dollars (approximately 27.9 million yen).