[Global Crypto Assets & Finance Conference 2021] “Crypto-Currency Regulation in Singapore: An overview”_Eric Chan, Partner of ShookLin&Bok Law Firm

• Global Crypto Assets & Finance Conference 2021
• Host: Delio, Korea Crypto Finance Association (KCFA)
• Date: January 27th — January 29th, 14:00–16:10
• Website: https://conf.delio.io

Session 3: Crypto Asset related Systems and Regulations

▣ Crypto-Currency Regulation in Singapore: An overview_Eric Chan, Partner of ShookLin&Bok Law Firm

Eric Chan began his speech by stating that the Singapore Court of Appeal recognizes that cryptocurrency can be treated as property. He mentioned a quote that stated, “There may be much to commend the view that cryptocurrencies should be capable of assimilation into the general concepts of property. There are, however, difficult questions as to the type of property that is involved. It is not necessary for us to come to a final position on this question in the present case. …”

History of Crypto-Currency in Singapore

Eric Chan explained the short history of crypto-currency in Singapore that began in November 2017. He explained that Initial coin offerings (ICOs) begin to gain prominence in Singapore and all over the world and the Popularity of Singapore as an ICO originating country peaks in mid-2017. He stated that in January 2019, the Singapore Parliament passes the Payment Services Act, which will include regulation of intermediaries that provide digital payment token services, and that the Payment Services Act came into force in January 2020.

How Crypto-Currencies are Treated under the Current Regulatory Framework in Singapore

He mentioned that there are currently two regulatory frameworks: the Capital Markets Regulatory Framework and the Payment Services Act. He continued to explain that the Capital Markets Regulatory Framework is established by two legislations, which are the Securities and Futures Act (SFA) and the Financial Advisers Act (FAA).

Regulation under Singapore’s Capital Markets Regulatory Regime

Firstly, he went into the Capital Markets Regulatory Framework. He shared that if a crypto-asset has features that make it a product that is within the scope of the SFA or FAA, licensing rules may apply to the intermediary.

Regulation under the Payment Services Act

He then moved on to talk about the Payment Services Act. He introduced the seven types of licensable payment services, the concept of a digital payment token, and recent amendments made to the Payment Services Act.

Moreover, he mentioned what a DPT service is and ruled it into new and existing properties. The old properties included dealing (buying and selling) and exchanging (possession). On the other hand, the new properties included safeguard and custody, inducing transactions, arranging transmission, and accepting for transmission.

Tiered Licensing under the Payment Services Act

He then moved on to explain the various tiered licensing under the PSA. First, he mentioned the ‘Money changing license’, which is only for money changing service. Second, the ‘Standard Payment Institution (SPI) license’, which he explained is restricted to payment transactions where the total transaction value (averaged over a calendar year) is S$3m or less (for one payment service) or S$6m or less (for any 2 or more payment service). Thirdly, he explained that the ‘Major Payment Institution (MPI) license’ has no restrictions in payment transaction flows or thresholds.

Conduct Requirements on DPT Service Providers

He concluded his speech by talking about the new rules that the Monetary Authority of Singapore (MAS) may impose on DPT service providers. Some of these requirements that needed to be satisfied included rules related to the extent to which customer assets may be commingled, the safeguarding of customer assets, and other operational or business conduct restrictions.

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