The Monetary Authority of Singapore (MAS) announced today that it plans on regulating virtual currency.
The announcement stops short of mentioning full scale Regulation as found with conventional currency, instead focusing on anti-money laundering and terrorist financing (ML/TF) risks. But it is a first step, and an important one in getting other governments to follow suit and developing to the next stage.
Regulation will require intermediaries dealing with virtual currency to report suspicious activity on the ML/TF front to the MAS, as already required of money changes and cash remittance businesses.
MAS made the disclaimer that nobody should misconstrue the regulation as extending any form of protection to investors in virtual currency as it would for conventional currency. Holders of virtual currency are still subject to losses arising from vulnerabilities in the currency, its intermediaries or the way it's transacted. It rehashed its earlier warning on virtual currencies.
Ong Chong Tee, Deputy Managing Director of MAS 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.”
It can be said that Singapore's move is the most advanced thus far on this front from any country. France has for some time required ML/TF vigilance from virtual currency operators dealing with fiat, but nothing for those who don't.
Canada had earmarked budget funds for FINTRAC for ML/TF monitoring. And in New York State, regulation is just starting to get off the ground but its scope still to be determined.
itBit, a new Singapore-based Exchange which endeavors to apply bank-grade standards of security and ML/TF policy, has applauded the move, saying to DC Magnates, "As outfits which knowingly engage in questionable transactions are regulated out of the market, consumers win."
