Cryptocurrency License, Singapore

Singapore is currently one of the jurisdictions that has established the regulation of cryptocurrency exchanges. During 2014-2018, the National Regulatory Authority (MAS) issued interpretations expressing its position on cryptocurrencies, the functioning of ICOs, and the licensing of a cryptocurrency exchange in Singapore.

In 2019, a new Law on Payment Services came into force, which introduced 2 types of licenses: a small payment institution and a large payment institution. Currently, those who manage cryptocurrency exchanges must obtain a license in Singapore. In addition, if a company deals with cryptocurrencies that can be classified as securities, such persons must be licensed to the stock exchange.

A cryptocurrency license in Singapore implies obtaining a payment license – Standard Payment Institution (SPI) License and compliance with the requirements of AML legislation.

Preparatory stage

      1. Checking the name of the future company for uniqueness
      2. Signing of Shareholder’s Particulars, Constitution of the Company, BO Declaration.
      3. Sending scanned copies of signed documents to the Singapore office
      4. Регистрация компании
      5. Signing of the Indemnity Agreement and sending its scanned copy to the Singapore office
      6. Consular legalization of documents
      7. Delivery of documents

Identification data for all members of the company

For individuals:

      • foreign passport
      • proof of residence (payment for utilities or bank statement)
      • CV (resume)

For legal entities:

      • registration certificate
      • memorandum of association
      • statute
      • register of company executives and shareholders, etc. (documents must be translated into English and the translation must be notarized)
      • description of the planned activity

Standard Payment Institution (SPI) License

    • Working with digital tokens (cryptocurrencies)
    • Electronic money issuance
    • Domestic money transfers
    • Cross-border money transfers
    • Payment processing
    • Creation of electronic wallets
    • Limitations:
      • the volume of transactions is not more than 3 million SGD per month (on average for the year)
      • no more than 5 million SGD in the volume of daily unclosed transactions (daily emoney float)
    • Share capital from 100 thousand SGD

The Standard License has restrictions on the volume of transactions:

    1. S $ 3 million (about US $ 2,3 million) in monthly transactions for each of the selected payment services (excluding e-money issuance and money exchange services)
    2. S $ 6 million (US $ 4,6 million) in monthly transactions for two or more payment services (excluding e-money and money exchange services)
    3. no more than S $ 5 million ($ 3,7 million) of daily money float.

Singapore Citizenship Licensing Requirements

The law sets strict restrictions on the availability of beneficiaries who are citizens of Singapore. Depending on the organizational form, the following requirements are distinguished:

      1. Applicant Sole Proprietor must be a citizen of Singapore
      2. Limited Liability Organization – Most partners must be Singapore citizens
      3. Half of the shares of a company incorporated in Singapore must be owned by Singapore citizens
      4. If the company is incorporated outside of Singapore, the parent company must be a foreign bank or foreign exchange business and meet the following criteria:
        1. A bank with an international reputation in another jurisdiction
        2. Has a good reputation and meets the “fit and proper” test
        3. Meets local AML and CFT requirements

This service is usually provided by the director of the company.

Requirements for obtaining a payment system license in Singapore

To obtain a payment system license in Singapore, you must meet the following requirements:

      1. Registered company in Singapore
      2. Doing business
      3. The presence of 2 executive directors (residents of Singapore) and an AML officer (the function is one of the directors)
      4. Defined corporate structure
      5. Compliance of directors, beneficiaries and employees with certain requirements
      6. Competence of directors, which implies the presence of relevant experience of the officers of the company
      7. The presence of a permanent office in Singapore, where any data will be stored. Also, the applicant must indicate at least one person who will always be available for customer inquiries.
      8. The size of the minimum authorized capital depends on the type of license:
        1. For a standard license – 100 thousand dollars
        2. For the main license – 250 thousand dollars
      9. Financial collateral, which represents the minimum reserves of the company provided to the regulator
      10. If all transactions for a month do not exceed $ 6 million for any of the services – $ 100 thousand
      11. In other cases – 200 thousand dollars
      12. Technological risk management. The applicant must pass a test confirming that the cryptocurrency exchanger is capable of identifying risks. This test must be passed after the application is submitted, but before the license is issued.
      13. Independent audit
      14. Major shareholders, including the parent company, must send a document that they undertake the relevant obligations.

Responsibilities of a cryptocurrency exchanger licensed in Singapore

The regulator pays special attention to the obligations of a cryptocurrency exchanger after obtaining a license. These include:

  • Annual audit
  • Monthly report on provider bills, transfer volume
  • Additional obligation for token providers to provide a report every six months on high-risk transactions
 
 

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DMITRII BONDARENKO

DMITRII BONDARENKO
DIRECTOR OF COMPANY

MAIIA RIAZANOVA

MAIIA RIAZANOVA
DIRECTOR OF THE COMPANY'S LEGAL DEPARTMENT

IGOR SMIRNOV

IGOR SMIRNOV
LAWYER, AML COMPLIANCE, FINANCIAL LAW

Arnold Woicehovski

Arnold Woicehovski
LAWYER