In its response to a parliamentary question on cryptocurrency use and their regulation, the Monetary Authority of Singapore (MAS) has said that it is working on a regulatory framework to address the money laundering and terrorism financing risks posed by virtual currencies.

Member of Parliament Cheng Li Hui queried:

“To ask the Prime Minister (a) whether the Government is keeping track of the use/investment of crypto currencies such as bitcoin in Singapore; (b) how do crypto currencies affect our finance industry; (c) whether studies are being conducted to assess the problems and risks of using/investing in crypto currencies; and (d) whether regulatory frameworks are necessary in the future.”

In response, Tharman Shanmugaratnam, Deputy Prime Minister and Minister in charge of MAS, said that the MAS does not regulate virtual currencies such as bitcoin, but regulates the activities that surround them if they fall within its general ambit as a financial regulator. He said:

“Virtual currencies, due to the anonymous nature of the transactions, can be exploited for money laundering and terrorism financing risks. MAS is working on a new payment services regulatory framework that will address these risks.”

Recently, the MAS issued a statement clarifying that will regulate the offer or issue of digital tokens if they constitute products regulated under the Securities and Futures Act (SFA). Shanmugaratnam said that the MAS has not issued new legislation specifically for Initial Coin Offerings (ICOs), but will continue to monitor this space.

He concluded saying:

“MAS does not and cannot regulate all products that people put their money in thinking that they will appreciate in value. But recognising that the risks of investing in virtual currencies are significant, MAS and the Commercial Affairs Department have published an advisory alerting consumers to these risks, and are working together to raise public awareness of potential scams.”