Public feedback wanted for code of practice for cryptocurrency sector

Singapore

THE Association of Cryptocurrency Enterprises and Start-ups, Singapore (Access) invites public feedback on its draft code of practice targeted at cryptocurrency industry players in Singapore.

The code of practice is an initiative by Access named Standardisation of Practice In Crypto Entities (Spice), and complements the Payment Services Act as it standardises the voluntary approach to tackling anti-money laundering and counter financing of terrorism, know-your-customer best practices, as well as other key issues relevant to crypto-asset and blockchain companies.

Crypto companies will be able to enhance their reputation and assist banks in assessing the money laundering and financing terrorism risks that banks are exposed to when servicing crypto clients that comply with the code, said Access in a media statement issued on Tuesday.

The Monetary Authority of Singapore (MAS) told The Business Times that banks are required to perform anti-money laundering and countering the financing of terrorism (AML/CFT) measures on their customers, including crypto firms. These include performing customer due diligence and ongoing monitoring of customers who want to open accounts with banks in Singapore.

In contrast, the crypto sector is regulated by the MAS under the Securities and Futures Act (SFA) or upcoming Payment Services Act (PS Act), depending on the underlying activity.

"In this regard, the relevant regulatory requirements under the SFA and the PS Act on prevention of money laundering and countering the financing of terrorism will apply to crypto players. The AML/CFT requirements that the crypto sector will be subject to are similar to those of other financial institutions regulated for AML/CFT in Singapore, and consistent with international standards set by the Financial Action Task Force, " the MAS spokesman commented.

The code of practice - facilitated by the MAS and developed in consultation with the Association of Banks in Singapore - underscores the importance of partnership to strengthen and complement regulatory compliance for the sector, Access noted.

Anson Zeall, chairman of Access, said: "Spice . . . aims to remove some roadblocks which have been hindering the growth of the sector. In essence, the code of practice helps banks and industry players to sieve out the 'bad', so that quality licensed blockchain and crypto-asset businesses can grow here in a bigger way and make a stronger imprint on the global stage."

Access has about 400 corporate members.

Sopnendu Mohanty, chief fintech officer of MAS, said that the regulator welcomes the ground-up collaborative effort by the industry to develop a set of guidance to help banks and crypto blockchain startups strengthen regulatory compliance.

"The challenge for regulators has been to harness the potential benefits of blockchain technology and crypto tokens while ensuring that the risks are contained," he noted.

Samuel Lim, chief compliance officer at Binance, said that the code is a strong call to action on the current market needs and what the community has been seeking. "We are looking forward to this initiative that bridges the public and private sector in the best interest of the market's growth and sustainable future, and helping to create an industry standard for stakeholders, digital asset businesses and individuals alike."

Binance is a global cryptocurrency exchange and blockchain ecosystem.

Access welcomes the public's feedback on the code via spice@access-sg.org by Sept 10.