Crypto exchange gets Singapore nod on digital token services

It is one of the first virtual asset service providers to obtain an in-principle approval letter for a Major Payment Institution License.
It is one of the first virtual asset service providers to obtain an in-principle approval letter for a Major Payment Institution License.PHOTO: REUTERS

(BLOOMBERG) - The Monetary Authority of Singapore (MAS) has granted an "in-principle approval" under the Payment Services Act to cryptocurrency exchange Independent Reserve, allowing it to operate as a regulated provider for digital payment token services.

It is one of the first virtual asset service providers to obtain an in-principle approval letter for a Major Payment Institution License in Singapore, according to a statement from the company.

"To be one of the first cryptocurrency exchanges to be notified by MAS of our in-principle licensing approval is a reflection of the robustness of the policies, procedures and risk management systems that we have put in place to guide our day-to-day operations," Independent Reserve's chief executive Adrian Przelozny said in the statement. "It provides certainty for us as industry participants and security for our customers."

Several applicants were in the final stages of review for getting a license to operate as digital payment token service providers, Senior Minister and MAS chairman Tharman Shanmugaratnam said in reply to a question in Parliament on July 26.

Around 170 applicants have applied to provide digital payment token services since the commencement of the Payment Services Act in January last year, Mr Tharman, who is also Coordinating Minister for Social Policies, said at the time, adding that 30 applications have been withdrawn after engagement with MAS while two had been rejected. Around 90 service providers are operating under an exemption from holding a license, he said.

Applicants will be "subject to close scrutiny in the licensing process and ongoing supervision by MAS", the regulator said in response to queries from Bloomberg some weeks ago.

Established in Australia in 2013, Independent Reserve embarked on its international expansion plans in late 2019, setting up its first overseas operations in Singapore to provide digital asset exchange and over-the-counter trading services to people and institutions in Singapore.

An MAS spokesman told The Straits Times that the central bank recently notified several of the 170 applicants that it is prepared to grant them payment services licences under the Payment Services Act. 

"Applicants who have received such notifications from MAS do not yet hold payment services licences. A licence will be subsequently granted to an applicant, provided it puts in place necessary measures to meet MAS’ requirements in order to operate as a licensee,” the spokesman said, adding that MAS continues to review the outstanding digital payment token applications.

Several digital payment token applicants have not met the central bank’s standards in money laundering and terrorism financing, as well as technology risk controls.

The spokesman said: “MAS takes a serious view of weaknesses in controls to address money laundering and terrorism financing, and technology risks, and will reject applicants who fail to meet the required standards.”

Additional reporting by Prisca Ang