Singapore to License Digital Payment Providers – How to comply with AML/CTF requirements on virtual assets?




Date: August 19th 2021

Published on: Global News, Regulation


AML, AML/CTF, crypto AML, Crypto Compliance, Cryptocurrency, Cryptoregulation, CTF, MAS, Monetary Authority of Singapore, Payment Service Act,

Key takeaways:

  • Singapore is preparing to license the first virtual asset businesses that want to operate in the city-state.
  • These businesses must comply with several requirements set by the country’s monetary authority (MAS).
  • Scorechain released guidelines to help digital asset businesses to implement a risk-based approach to transaction monitoring.

Singapore’s Central Bank, the Monetary Authority of Singapore (MAS) is preparing to hand out payment services licenses to virtual asset service providers (VASPs) as reported by the South China Morning Post1 earlier this month. 

The Central Bank notified several applicants (out of 170) that they will get licensed to operate in the city-state if they put in place measures to meet the requirements set by the MAS. Some applicants did not meet its standards “in the area of money laundering and terrorism financing and technology risk controls”: two applications had already been rejected while 30 were withdrawn. The Authority already granted 2 in-principle approvals to an Australian exchange and a Singaporean bank2 last week.

Singapore is one of the crypto hubs in Asia along with Hong Kong that also recently implemented stricter rules on cryptocurrencies. The news was welcomed by the crypto industry as some believe it will help increase crypto adoption of institutions notably and attract virtual asset companies to the city.

Complying with Singapore’s MAS virtual asset requirements

Virtual asset regulation in Singapore is mainly composed of the Payment Services Act (PSA)3 implemented in January 2020 which requires VASP, e-money, and digital token services to comply with the related AML /CFT policies. (Read more: Cryptocurrencies Regulatory Landscape in Singapore)

In mid-2020, the MAS further strengthened the regulation by implementing stricter transaction monitoring and customer identification rules on virtual asset businesses. 

Under the regulation, virtual asset businesses also require a license to operate in the city-state. Some businesses were exempt from this requirement during the licensing process but now Singapore has started the process and is preparing to approve the first batch of businesses.

To help virtual asset businesses in Singapore comply with AML/CTF regulations, Scorechain released a Guide on implementing a risk-based approach on transaction monitoring

How Scorechain can help crypto businesses to be compliant in Singapore?

Scorechain helps more than 100 crypto businesses located in 37 different countries with several of them established in Singapore. 

TripleA, one of Scorechain’s loyal customers, is a crypto-payment gateway established in Singapore that is quickly expanding worldwide. Compliant with the Monetary Authority of Singapore (MAS), Triple-A is using Scorechain crypto compliance solution for transaction monitoring and to meet crypto AML standards. Grace Lok, Business Controller at TripleA explained that Scorechain solution’s accuracy and reliability are of utmost importance for the company and that red flags on illegal addresses/transactions are very useful in their daily compliance work. 

With Singapore’s Central Bank preparing to grant licenses to VASPs, it is of great consequence for crypto businesses wanting to operate in the city-state, to comply with the AML/CFT requirements set by the Authority.

Want to make your crypto business MAS-compliant? Scorechain can help you in your compliance journey. Contact us to get a free demo and try out Scorechain solution.

About Scorechain

Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a leader in crypto compliance since 2015, the Luxembourgish company serves more than 100 customers in 37 countries, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets customers onboarding, audit and law firms and some LEAs.

Scorechain solution supports Bitcoin analytics with Lightning Network detection, Ethereum analytics with all ERC20 tokens and stablecoins, Litecoin, Bitcoin Cash, Dash, XRP Ledger and Tezos. The software can de-anonymize the Blockchain data and connect with sanction lists to provide a risk scoring on digital assets transactions, addresses and entities. The risk assessment methodology applied by Scorechain has been verified and can be fully customizable to fit all jurisdictions. 300+ risk-AML scenarios are provided to its customers with a wide range of risk indicators so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.