On 13th March, in a press release, the Monetary Authority of Singapore (MAS) said that it will regulate virtual currency intermediaries in Singapore to address potential money laundering and terrorist financing (ML/TF) risks. The regulatory body believes that virtual currency transactions, given their anonymous nature, are particularly vulnerable to ML/TF risks.
According to deputy Managing Director of MAS, Mr. Ong Chong Tee MAS is taking a targeted regulatory approach to virtual currencies to specifically address money laundering and terrorist financing risks. MAS’ move will make Singapore one of the first countries in the world to regulate virtual currency intermediaries for ML/TF risks.
Currently, Singapore does not have any framework to regulate virtual currencies; however, as MAS feels the risk is going up, a need is being felt. Now, MAS’ regulation of virtual currency intermediaries will be doing the much needed job to jab money laundering and terrorist financing risks they pose.
MAS believe that it has become urgent to address the issue of money laundering and terrorists’ funding thereby and for that it is introducing regulations. Now, virtual currency intermediaries that buy/sell or facilitate the exchange of virtual currencies for real currencies will be asked to verify the identities of their customers.
Additionally, virtual currency intermediaries will have to report suspicious transactions to the Suspicious Transaction Reporting Office. MAS indicate that such measures are not new as similar regulations are on money changers and remittance businesses who undertake cash transactions.
MAS Had Cautioned Digital Currency Users Earlier
The new measure on the part of MAS is well intended as it aims to protect digital currency users. Earlier in June 2013, MAS had cautioned consumers and businesses of the significant risks associated with virtual currency transactions. Then, it had said that the value of virtual currencies can fluctuate greatly within a short period of time and that is quite risky.
Then, MAS had also said that consumers and businesses may suffer significant monetary losses as a result of the volatile prices. The recent events that include Mt. Gox collapse have furthered the concerned among the ranks in government. As MAS had warned that digital currencies are not issued by identifiable organization, grievance redressal is difficult.
It had then warned that consumers and businesses may not be able to obtain a refund of their monies should virtual currency schemes or intermediaries cease to operate.
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