The Monetary Authority of Singapore has issued new regulations that may impose stricter oversight on cryptocurrency institutions

Author: Aiying

On May 31, 2023, the Monetary Authority of Singapore (MAS) issued a new notice titled "MAS Notice FSM-N01," aimed at imposing stricter regulations on the business conduct of financial advisory service providers. This new regulation affects all companies providing financial advisory services in Singapore, including those offering cryptocurrency advisory services.

The new regulation outlines the conduct rules that financial advisory service providers must adhere to. These rules include how to handle and resolve customer complaints, how to manage customers' personal information, and how to provide appropriate financial advisory services to clients. Companies that violate these regulations may face penalties from the Monetary Authority of Singapore.

Possible penalties may include:

1. Fines: MAS may impose fines on non-compliant companies. The amount of the fine is usually determined based on the severity of the violation and the size of the company.

2. License suspension or revocation: If a company's violations are particularly severe, MAS may suspend or revoke their license, preventing them from providing financial advisory services in Singapore.

3. Warnings or reprimands: For less severe violations, MAS may issue warnings or reprimands, requiring companies to rectify their behavior.

4. Legal action: In certain cases, MAS may take legal action against the violating company or individual.

Industry Impact

For the cryptocurrency industry, first, cryptocurrency companies need to conduct more stringent customer due diligence, including identifying and reporting their "high-risk customers," such as politically exposed persons (PEPs) and their close associates. This may increase their compliance costs but can also help them better understand their customer base, allowing them to implement appropriate risk control measures.

Therefore, an efficient, globally comprehensive, low-cost automated AML & KYC compliance solution is an essential tool in the current tightening global regulatory trend.

(Aiying has extensive experience in the industry, particularly in anti-money laundering, and is open to consultations)

Secondly, the new regulation emphasizes how financial advisory service providers should handle customer complaints and protect customers' personal information. This may enhance the protection of cryptocurrency investors but could also present challenges for companies in managing customer privacy.

Overall, this new regulation from the Monetary Authority of Singapore presents new challenges for the cryptocurrency industry but also offers new opportunities. Companies need to adapt to these new regulations to ensure their business can operate in a more transparent and fair environment.