Obtaining a Cryptocurrency License in Singapore

Obtaining a Cryptocurrency License in Singapore

Since 2020, the Payment Systems Act (PSA) has required all crypto businesses to obtain a license to conduct cryptocurrency activities in Singapore. The creation of a strong regulatory framework for digital payment tokens, covering all digital currencies, is designed to protect the interests of trading platforms and users and also provide a transparent and regulated environment for cryptocurrency trading.

As a result, a solid and reliable foundation is being laid for the development of innovative enterprises, attracting the attention of people interested in creating cryptocurrency enterprises in Singapore.

Advantages of registering a cryptocurrency company with a license in Singapore:

Required Documents to Obtain a Virtual Currency License in Singapore:

When applying for a virtual currency license in Singapore, several documents are required.

• A business plan with a clearly stated strategy and plans for the development of a cryptocurrency business. It covers the company's mission, business model, projected revenues and expenses, and marketing and operating strategies.
• Singapore's KYC and AML policy document outlines the procedures the company will use to verify customers and fight financial crime.
• The company must formulate an internal policy governing its dealings with cryptocurrencies. This includes transaction processing procedures, the security of customer funds, risk management protocols, and compliance systems.
• Risk assessment and mitigation measures, which include monitoring the market, identifying potential threats, and developing strategies to prevent potential problems,
• Annual internal and external audit reports regarding the company's financial operations and regulatory compliance.
• Demonstration of possession of the necessary authorized capital to facilitate transactions with cryptocurrency. This may require the submission of documents confirming the availability of funds or financial support.

In addition to these documents, MAS may request additional documentation or information in accordance with its specific rules and requirements. Therefore, to ensure a complete understanding of documentation and compliance procedures, it is prudent to consult closely with MAS or engage cryptocurrency experts.

Banking Requirements for Opening a Crypto Company Account in Singapore:

To open a cryptocurrency company account in Singapore, banks typically have specific requirements and due diligence processes. Here's a detailed description of these requirements:

• Good Reputation: Banks are keen on the reputation of the company as well as its directors and founders. They may request information about prior business dealings to ensure they align with the bank's standards and regulations.
• Business Plan: A detailed business plan outlining the company's activities, goals, anticipated turnover, and development plans is often required. This plan aids the bank in assessing the financial strength and future prospects of the company.
• Compliance with Rules: Support in setting up a cryptocurrency exchange in Singapore will help companies comply with all relevant rules and regulations set by the regulators. Banks will scrutinize whether the company complies with requirements related to anti-money laundering (AML) and counter-financing of terrorism.
• Registration Documents: Banks will typically request documentation confirming the legality of the organization and its activities. This may encompass incorporation documents, licenses to operate cryptocurrencies in Singapore, client contracts, and other legal documentation.
• Financial Data: The bank may require financial data such as income and expense statements, balance sheets, and related documents. This assists the bank in evaluating the company's financial position and its capacity to meet financial commitments.

Requirements After the Establishment of a Cryptocurrency Company in Singapore:

After successfully establishing a cryptocurrency exchange in Singapore and obtaining the requisite license, several ongoing requirements must be met:

• Recruitment: If you intend to operate a cryptocurrency fund in Singapore, you must hire employees who possess the requisite skills and knowledge to conduct cryptocurrency transactions in accordance with MAS regulations.
• Transaction Control and Accounting: Ensure that all transactions on your platform are rigorously monitored and maintain proper records. This includes logging and tracking all completed transactions and secure storage of transaction data.
• Customer Information Storage and Anti-Money Laundering: Store customer information securely and actively monitor transactions to identify suspicious activities. If any suspicious transactions are detected, you must report them to the relevant authorities and cooperate in any subsequent investigations.
• Regular Reporting: Regularly provide reports on your activities to MAS. These reports may encompass financial information, transaction statistics, customer data, and other information required for regulatory oversight.
• Employee Training: Continuously provide training to your employees to ensure they have the necessary knowledge and skills for the effective operation of a cryptocurrency company. Training areas may encompass rules and regulations, data security, fraud prevention, and other key aspects of cryptocurrency operations.

Conclusion

Singapore provides a broad spectrum of business opportunities in the cryptocurrency sector, encompassing cryptocurrency exchange, mining, consulting services, and IT product development. Establishing a cryptocurrency company in Singapore presents a promising opportunity for entrepreneurs in the field. There is an advantageous business environment, a robust financial infrastructure, and a center for innovation in Singapore. However, the process of obtaining a license from the Monetary Authority of Singapore entails meeting specific requirements and additional criteria for opening accounts for cryptocurrency companies.

Key information you should know before applying for a cryptocurrency license in Singapore:

• A local manager is mandatory.
• The minimum authorized capital requirement starts at SGD 100,000.
• The corporate tax rate is 17% for cryptocurrency companies in Singapore.

Singapore offers different types of crypto licenses:

1. SPI (Standard Payment Institution): Monthly transaction limit of SGD 3 million.
2. MPI (Major Payment Institution): The monthly transaction limit starts at SGD 3 million.

These licenses open the door to various opportunities in the cryptocurrency sector in Singapore.