The Monetary Authority of Singapore (“MAS”) has issued guidelines giving effect to MAS’ expectations that Digital Payment Token (DPT or more commonly known as cryptocurrency) service providers should not promote their DPT services to the general public in Singapore. This is owing to the fact that the trading of DPTs is highly risky and not suitable for the general public.
Under the Payment Services Act (“PS Act”), entities which provide services relating to DPTs are regulated primarily for money laundering and terrorism financing risk, as well as technology risk. Customers of regulated entities must be informed of the risks of trading in DPTs under the PSN08 Notice on Disclosures and Communications but are otherwise not subject to any statutory protection for their trading of DPTs.
The new guidelines apply to the following entities:
- DPT service providers which have been granted a licence under the PS Act;
- banks and all other financial institutions providing DPT services in Singapore; and
- DPT service providers which are currently operating under the transitional exemption (collectively referred to as “DPT service providers”).
We set out below a summary of the parameters within which these DPT service providers may promote their services.
DPT service providers may not:
- Promote their DPT services in public areas in Singapore or through any other media directed at the general public in Singapore;
- Trivialise the risks of trading in DPTs in a manner that is inconsistent with or contradicts the risk disclosures under PSN08 Notice on Disclosures and Communications;
- Engage third parties, such as social media influencers or third-party websites, to promote their DPT services to the general public in Singapore;
- Provide physical ATMs in public areas in Singapore to facilitate public access to their DPT services; and
- Promote payment token derivatives (“PTDs”) to the public as a convenient unregulated alternative to trading in DPTs or mislead the public that PTDs are less risky than DPTs – instead, licensees must take all necessary steps to ensure customers do not confuse any PTD services as being regulated by MAS.
DPT service providers may, however, promote their services on their own corporate website, mobile applications, or official social media accounts, and offer PTD services through a legal entity which is not licensed under the PS Act.
For further information, please contact:
Peiying Chua Heikes, Partner, Linklaters
peiying.chua@linklaters.com
