Updated: 03/14/2014 01:20

MAS to address risks posed by virtual currencies

MAS to address risks posed by virtual currencies

Virtual currency intermediaries in Singapore will be regulated to address potential money laundering and terrorist financing risks. 

The Monetary Authority of Singapore, MAS, says it will introduce regulations within a year requiring intermediaries that buy, sell or facilitate the exchange of virtual currencies for real currencies to verify the identities of their customers. 

They will also be required to report suspicious transactions. 

Singapore will be the second country in the world after the U.S. to regulate virtual currency intermediaries for such risks. 

The requirements will be similar to those imposed on money changers and remittance businesses who undertake cash transactions. 

Like most jurisdictions, MAS says Singapore does not regulate virtual currencies per se, as these are not considered as securities or legal tender. 

Its regulation of virtual currency intermediaries pertains specifically to the money laundering and terrorist financing risks they pose. 

It does not extend to the safety and soundness of virtual currency intermediaries nor the proper functioning of virtual currency transactions. 

It says investors in virtual currencies will not have the safeguards that investors in securities enjoy under the Securities and Futures Act and the Financial Advisers Act.

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