The measure also applies to cover any service provider with virtual assets. The requirements’ goal is to reduce risks of money laundering and terrorist financing.
The Monetary Authority of Singapore updated a guide with a list of regulations that Virtual Asset Service Providers (VASPs) must obey. The organization warned that operations between bitcoin exchanges and private or external wallets must identify the users and their proper ownerships.
In the document, the authority explained in detail that its purpose is to guarantee identification to make “control obligations” easier, corrupting the right to privacy. Regulators argued that the data would serve as an “audit trail” that would permit law enforcement agencies to require vital information for their investigations and inspections.
The entity explained that when value transfers occur between VASPs on behalf of its clients, the originating VASP must validate and bring the necessary data about the sender and the beneficiary immediately and in the safest way possible.
Suppliers must request data on what the purpose of the transaction is. They should also increase monitoring of traders’ accounts and record any unusual fund movements that could appear to be suspicious or shady.
Regulations of Bitcoin under the FATF
The monetary authority guidelines adjust to the policies of the International Financial Action Task Force (FATF). This organization is currently debating new regulations on cryptocurrencies, exchanges, P2P markets, stablecoins, and even decentralized finance (DeFi).
In fact, both in Singapore and on a global scale, Bitcoin regulations could face growth. As representatives of the States, the monetary authorities seek to mediate in a system that was born precisely to do without them.
The argument for regulating the technology is the “fight” against money laundering and terrorist financing. Regulators in the Asian country exercise more control by saying that any supplier must apply to obtain a license and operate in their territory.
The requirements to acquire the permit go to demonstrate that the company can considerably reduce money laundering risks. The company has platforms to follow users’ steps and the transactions they are constantly carrying up.
International Organizations Such as the Coin Center are Worried about the Regulations from the FATF
Some of the new regulations from the Monetary Authority of Singapore came to be effective and fully applied in January this year. However, the news spread of the already updated
guidelines could represent a warning from regulators for those startups that would still be operating without permission.
International organizations such as the Coin Center have raised concerns about the regulations from the FATF. The non-profit institution said two weeks ago that the guidelines are openly violating the privacy of users.
It is also essential to consider that, In January 2018, the Prime Minister of Singapore, Tharman Shanmugaratnam, said that trading with bitcoin and cryptocurrencies, in general, would not disappear completely. The official announced that a regulatory framework for the industry would face new implementations.
By: Jenson Nuñez
