Singaporean digital asset exchanges will be receiving some regulatory relief, thanks to COVID-19. The Monetary Authority of Singapore (MAS) will allow 415 applications to continue operating without a license until July 28, 2020.
With this decision, the MAS is granting an exemption to registration requirements for several businesses, including Binance, Alibaba.com, Alipay, Bitgo, Paxos, Paypal, Coinbase and Ripple. “Please note that these entities are not licensed under the PS Act to provide the specific payment services, but are allowed to continue to provide the specific payment services,” the MAS said.
Fortunately, this doesn’t provide cover for digital asset exchanges that never filed an application to operate legally. The MAS notes that businesses that failed to apply for a license will not benefit from the exception.
The Payment Services Act covers all digital asset businesses and exchanges, placing regulations on them to combat money laundering and terrorism financing. Firms that applies for a license would be expected to report on traders’ identities, suspicious activity, and otherwise complete other customer due diligence requirements. In many ways, this is like Europe’s Fifth European Anti-Money Laundering Directives, which started to come into effect this year.
This comes just a little over a week after the MAS updated its guidelines, urging applicants and members to monitor customer registrations. With controls in place, the exchanges would be expected to monitor activity, notify superiors of any lacks in oversight, and provide auditing functions.
The MAS’ allowance for applicants to continue operating, while licenses are unlikely to be granted during the time of coronavirus, makes plenty of sense. There’s no sense in stopping transactions simply because bureaucratic measures have to take a pause, and these groups are apparently trying to play by the rules, which is commendable.
But the regulator should remain vigilant, and keep a watchful eye on these applicants nonetheless. Binance in particular has been known to play fast and loose with the rules, allegedly allowing money laundering from several countries, while also suggesting work-arounds to customers who might be geo-blocked in their home countries.
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