Crypto Compliance in Singapore: What are the Travel Rule Regulations?
Insights from Singapore Law Firm CNPLaw LLP
In December 2019, the Monetary Authority of Singapore (MAS) issued a notice on the Prevention of Money Laundering and Countering the Financing of Terrorism - Digital Payment Token Service which became effective in January 2020. In summary, the purpose of the Notice is to regulate crypto transactions performed by companies registered in the country.
We spoke with Mr Quek Li Fei, partner of CNP Law LLP who heads the firm’s Bitcoin, Cryptocurrency and Initial Coin Offering department to understand a bit more about Singapore’s crypto regulation scenario.
To whom does the Travel Rule in Singapore apply?
According to Paragraph 13 of the Notice, the Travel Rule applies to payment service providers when sending or receiving one or more digital payment tokens by value transfer on account of the originator or beneficiary of the value transfer.
This means that any cryptocurrency transaction on behalf of a customer should follow the MAS established Travel Rule requirements, in line with the updated Recommendation 16 for wire transfers.
What are the Travel Rule requirements in Singapore?
In-depth requirements are explained in the Notice PSN02 Prevention of Money Laundering and Countering the Financing of Terrorism – Digital Payment Token Service. Notice PSN02 states that Singaporean companies need to conduct measures connected to the Travel Rule, which means assessing the risks inherent to the operation, performing customer due diligence on all clients, and sending, alongside the value transfer, the verified name and account number of both the sender and the beneficiary to the beneficiary’s virtual asset service providers (VASP).
However, for transfers exceeding SGD 2000 (approximately USD 1500), the originating VASP should also add a physical address, along with the place and date of birth, of the customer. Records are required to be kept for at least five years.