Cryptocurrency exchange license in Singapore
Thanks to the growing popularity of cryptocurrencies, e-commerce has received an additional impetus in development. The relevance of this payment instrument draws attention to it around the world. The purchase and sale of funds take place remotely, which means it is available from anywhere in the world. Total legality of actions provides an appropriate level of reliability and security.
The legislative policy of most countries needs to be clarified on the sale of tokens. In practice, national regulators need to improve the launch of the corresponding trading platform. The business gets a quick start in this direction by choosing a Singapore crypto license. It is one of the most useful and commercially viable documents among competitors. Legislative permission to exchange electronic currencies will allow you to develop your business in this area with minimal investment actively.
Singapore Crypto License Pack
The Singapore Licensing Organization, which draws up the title package, is the Monetary Authority. The media often refers to it by the abbreviation MAS (The Monetary Authority of Singapore). It is the largest financial regulator of the state, which controls the situation and issues permits. Due to the flexibility in defining commercial criteria, a company can obtain one of three types of licenses:
- A simple permission to exchange currency provides approval of ordinary transactions.
- You will need a standard license if you discuss more than two payment services.
- The package of a large enterprise has the most voluminous powers. It is issued if the monthly turnover exceeds SGD 3,000,000. There are increased requirements for reporting and internal control over operations.
Singapore’s cryptocurrency regulation only works with residents. It must be taken into account when doing business.
Cryptocurrency regulation in Singapore
The progressive business development policy has allowed the Asian state to consolidate the efforts of all branches of government for the common good. The current Law on Payment Services receives high marks from business and economic experts. Its provisions indicate all the requirements that an electronic crypto exchange must fulfill. It is positive that this act has stood the test of time; thousands of companies have begun to provide services based on it. MAS, a supervisory body, constantly monitors the activities of market participants. Failure to comply could result in the revocation of the crypto license in Singapore,bringing the business to a halt. Audits are planned and predictable, making reporting more straightforward.
The legality of Cryptocurrency Business in Singapore
The legal justification for cryptocurrency transactions was obtained in 2019. The Singapore International Commerce Court has emphasized virtual money’s importance and determined it is a lawful means of holding property. Although formal tokens are not a technological means of payment, they have received all the characteristics of a monetary unit.
In the same year, a law was adopted that spelled out the procedure for providing payment services. It is significant that with national support, one of the largest crypto exchanges in the world, DBS Digital Exchange, operates in this country.
Does this country have AML regulations?
This country has taken measures to ensure the safety of investors and prevent illegal transactions. Cryptocurrency firms need to follow laws to combat the illegal transfer of funds and the financing of terrorism. Cryptocurrency activities go through the process of identifying token issuers even before placing their tokens on the platform. The issuer of tokens bears verification costs. Compliance with the AML policy involves:
- to carry out a complex check of clients;
- monitor all transactions of its clients to detect illegal movements of assets;
- check clients according to international lists for UN sanctions;
- constantly monitor the organization’s activities and report to MAS when the transaction seems suspicious.
Who regulates cryptocurrencies?
Crypto regulations strive to protect their citizens from money laundering, fraud and financial terrorism.
Singapore’s cryptocurrency regulations are enforced by the Monetary Authority Regulation (MAS), taking steps to conduct and protect crypto businesses from fraud legally.
Until recently, the regulatory body MAS has clarified its positions on crypto activities. But three years ago, the Payment Service Act 2019 was signed, based on which organizations exchanging cryptocurrency (for another cryptocurrency or fiat funds) must obtain a license (Small Payment Institution – a small payment organization or Major Payment Institution – the leading payment institution).
The leadership of the regulator has several options in which the placement of tokens on the sales platform falls under securities law. Such tokens are the top levers of the capital markets. And in January 2020, this country signed the PSA, which controls both classical and cryptocurrency transfers and exchanges. The purpose of the law is to provide a foundation for the registration of permits for exchanges dealing with cryptocurrencies. Thus, the Singapore crypto currency currently exists under the law’s conditions.
Are there any licensing for VASPs?
You must legally obtain a license to engage in cryptocurrency transactions (find a company or provide a VASPs platform). Regulatory authorities ensure that only licensed firms/platforms enter into transactions. The requirements for obtaining a permit are:
- develop a program to identify risks;
- crypto – activities are honest and understandable;
- there must be a cash reserve, as well as the availability of personnel
- inform the services if there are changes in the activity;
- make a database on the list of all transactions;
- to conclude transactions only within the limits of laws.
All prepared documentation necessary for obtaining a cryptolicense must strictly comply with the legal standards of the republic.
If the control authority cannot verify the data provided, the client will be notified that additional documents must be presented. Otherwise, the permit will be denied.
Therefore, an organization that has decided to invest in the crypto business must adhere to these requirements and be guided by laws.
Singapore FATF Travel Rule Requirements
This country is a member of the FATF – an organization whose task is to block money laundering/criminal assets and terrorist financing. The Presidency pays special attention to the fight against illegal money transfers, namely:
- strengthens partnership with FATF;
- carries out work to identify unlawful funds;
- analyzes the methods and methods of illicit money transfers;
- examines the risks associated with the possibility of conducting criminal transactions;
- participates in the return of financial assets within the Global Network.
Types of permits for working with cryptocurrencies
If you decide to establish a crypto business in this country, you must go through the process of obtaining a permit:
- registration of a permit for a significant/leading payment company (Major Payment Institution);
- getting a standard license for a payment company (Small Payment Institution).
For a crypto license, there are requirements for a company of such a plan:
- company registration in this jurisdiction;
- confirm an office that is registered in this country;
- you need to have at least one local executive director.
The standard permit applies to firms with transactions for at most 3 million USD per month.
Requirements for getting a crypto permit
Cryptocurrency exchanges are intermediaries in the process of exchanging virtual or fiat currency. Suppose a cryptocurrency exchange becomes an intermediary for purchasing and selling tokens under securities laws. In that case, obtaining a license for a full-fledged financial stock exchange will be necessary.
A token will be equivalent to security if it corresponds to this type:
- shares: tokens, based on which the right of the owner is confirmed so that he can participate in the management of the company and receive profit from its activities;
- loan: tokens confirm the existence of a debt of the issuer of tokens to their holder.
These are the main types of tokens that are securities, but there are others.
A cryptocurrency license in Singapore has several requirements that must be met to obtain it:
- form a comprehensive scheme to keep the risks associated with the crypto business under control;
- be guided by the instructions for maintaining transparent and honest permission for issuers to trade tokens;
- have a sufficient financial base and human resources to ensure the safety of activities and save money on the platform;
- report all changes in the conduct of activities and cases of violation of laws;
- maintain an information base on transactions;
- contribute to the necessary stock of authorized capital;
- follow the requirements of laws, including the protection of confidential information.
Once the firm’s documents have been reviewed, the regulator initiates a review process. MAS also delves into the business model developed by the company to meet all the requirements and document the organization’s financial capabilities.
Please note that the laws of this country must execute all documents submitted for verification. If the company cannot confirm its financial position with the papers provided, MAS has the right to request additional information. And if this is issued to them, then the company will be allowed to obtain crypto licenses.
Therefore, a company that has decided to invest in the crypto business must adhere to the requirements and be guided by the framework of the republic’s legislation.
Following all these requirements and not violating the laws of this country, the company has every chance of being licensed.
Cryptocurrency Licensing Process
The openness of the registration process for foreign currency residents in Singapore has led to the revitalization of intermediary companies. Thanks to their services, all the efforts of people in business are reduced only to building a commercial plan and paying for the benefits of assistants. After that, you can start trading Singapore cryptocurrency. The licensing procedure includes the following steps:
- obtaining a bank account for servicing the enterprise;
- hiring employees and organizing management companies;
- solution of technical issues, including the launch of the company’s server and its integration into the World Wide Web;
- filing a request for an official permit.
The cost of a cryptocurrency license in Singapore
The financial conditions for starting the crypto-exchange work provide the costs of paying for the crypto currency exchange license and filling the authorized capital. For the company to start working, the amount of invested funds should be at least 166 thousand euros. This volume is insurance against the emergence of one-day firms.
The state fee for opening a business is 15,000 euros. It is an average figure against the rates adopted by other regulators. Verification of all submitted documents is at most 6 months.
Cryptocurrency tax in Singapore
The progressive token trading tax rate is quite peculiar in Singapore. The legislation considers the sale of cryptocurrencies as a barter process, which lowers fiscal requirements. If the operating turnover ceiling is met, income earned is taxed at the standard rate without progressive deductions. They are assigned only if the annual turnover turns out to be higher than 1,000,000 dollars in local currency. In this case, the rate of 7% is applied.
Benefits of the Singapore Crypto License
Government approval opens the door to the world of big business. Singapore’s commercial policy creates an atmosphere for opening its foreign exchange trading platform. A license for a crypto exchange is not just permission to conduct operations – it is an indicator of trust and security. Making it in this country has the following strengths:
- regulated procedure for all actions;
- reasonable requirements for the enterprise;
- the objective in terms of initial financial investments;
- relatively fast turnaround time.
Services of our company
If you need help understanding the peculiarities of the regulation of the crypto industry in this jurisdiction, you can contact the specialists of our company. They will conduct a full consultation, tell you what you need to pay attention to and answer all your questions. Usually, such a consultation lasts quite a long time, so we advise you to allocate the whole day for it.
Analyze all the data and decide that this jurisdiction is proper for you for licensing. Our specialists will help you register your organization here, collect the necessary documents and check how your company meets all the requirements of government regulators.
You can issue a power of attorney to our lawyers, who represent your interests in various organizations; for example, they can open a bank account for you or rent an office. They will also help to hire local staff, if necessary.
Thus, if you want to obtain a work permit in this jurisdiction, you can only do with the help of specialized lawyers. Our specialists will help you at all stages of licensing and make this process as simple and fast as possible
Conclusion
Obtaining a crypto exchange license is one of the most critical stages in the work of any crypto organization. If you want to register a company in this country, you should expect the licensing process to be challenging. Still, you will have the opportunity to enter a new market or create a company that works legally and actively develops in an up-and-coming country in the crypto industry.
FAQ
Today, several book organizations have received permission to operate in this jurisdiction; among the most famous are Coinbase and Blockchain.com. They have been thoroughly vetted by regulators and proven they are ready to work by local laws.
Singapore financial legislation is loyal concerning financial transactions with virtual currencies. Support for such a business is at the highest level. Precise regulation of these actions continues the state economic growth policy.
Fiscal features here are favorable for business organizations. The income tax is a pleasant 17%. At the same time, there is no provision for an increase in deductions with an increase in profits. This feature arose because crypto transactions are considered swaps, meaning their regulatory norms differ from currency requirements.