Singapore fears money laundering through Bitcoin

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Singapore_BitcoinThe Singapore government has said it plans to regulate virtual-currency intermediaries including operators of Bitcoin exchanges and vending machines to address potential money-laundering and terrorist-financing risks, Bloomberg reported. The Monetary Authority of Singapore (MAS) will require intermediaries that facilitate the exchange of digital currencies to verify customers’ identities and report suspicious transactions to a unit of the city-state’s police, it said in a statement on March 13. No timeframe was given.

Digital currencies have come under scrutiny in markets from China to Russia and the US, with some regulators calling for bans or limits on their use. Charlie Shrem, the founder of exchange company BitInstant, was charged in Manhattan two months ago with conspiring to launder $1 million of Bitcoins. He has denied the allegations.

“Consumers and businesses should take note of the broader risks that dealing in virtual currencies entails and should exercise the necessary caution,” MAS Deputy Managing Director Ong Chong Tee said.

In December, China’s central bank barred financial institutions from handling Bitcoin transactions following a surge in the currency’s value. Mt. Gox, a Japanese exchange operator, collapsed last month following the loss of Bitcoins valued at more than $500 million.

The new rules would make Singapore one of the first countries to target the risk of money laundering and terrorism financing among agents of virtual currencies, MAS said. Existing laws in Hong Kong already cover acts of fraud and money laundering involving “virtual commodities,” the Hong Kong Monetary Authority said.

Virtual currency intermediaries in Singapore will be subject to the similar rules that govern money changers and remittance businesses, MAS said. The rules won’t cover the “safety and soundness” of the intermediaries or the transactions, it said. The authority said it will monitor regulations in other jurisdictions and consider additional measures to address the risks posed by virtual currencies and their intermediaries.

A day before Mt. Gox filed for bankruptcy, Tembusu Terminals Pte set up what may be Singapore’s first machine for buying Bitcoins at a bar in the downtown Boat Quay district.

MAS doesn’t recognise Bitcoin as legal tender and had cautioned individuals about the use of virtual currencies, Tharman Shanmugaratnam, the regulator’s chairman and Singapore’s finance minister, said in Parliament on February 21.

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Reading Time: 2 minutes

The Singapore government has said it plans to regulate virtual-currency intermediaries including operators of Bitcoin exchanges and vending machines to address potential money-laundering and terrorist-financing risks, Bloomberg reported. The Monetary Authority of Singapore (MAS) will require intermediaries that facilitate the exchange of digital currencies to verify customers’ identities and report suspicious transactions to a unit of the city-state’s police, it said in a statement on March 13. No timeframe was given.

Reading Time: 2 minutes

Singapore_BitcoinThe Singapore government has said it plans to regulate virtual-currency intermediaries including operators of Bitcoin exchanges and vending machines to address potential money-laundering and terrorist-financing risks, Bloomberg reported. The Monetary Authority of Singapore (MAS) will require intermediaries that facilitate the exchange of digital currencies to verify customers’ identities and report suspicious transactions to a unit of the city-state’s police, it said in a statement on March 13. No timeframe was given.

Digital currencies have come under scrutiny in markets from China to Russia and the US, with some regulators calling for bans or limits on their use. Charlie Shrem, the founder of exchange company BitInstant, was charged in Manhattan two months ago with conspiring to launder $1 million of Bitcoins. He has denied the allegations.

“Consumers and businesses should take note of the broader risks that dealing in virtual currencies entails and should exercise the necessary caution,” MAS Deputy Managing Director Ong Chong Tee said.

In December, China’s central bank barred financial institutions from handling Bitcoin transactions following a surge in the currency’s value. Mt. Gox, a Japanese exchange operator, collapsed last month following the loss of Bitcoins valued at more than $500 million.

The new rules would make Singapore one of the first countries to target the risk of money laundering and terrorism financing among agents of virtual currencies, MAS said. Existing laws in Hong Kong already cover acts of fraud and money laundering involving “virtual commodities,” the Hong Kong Monetary Authority said.

Virtual currency intermediaries in Singapore will be subject to the similar rules that govern money changers and remittance businesses, MAS said. The rules won’t cover the “safety and soundness” of the intermediaries or the transactions, it said. The authority said it will monitor regulations in other jurisdictions and consider additional measures to address the risks posed by virtual currencies and their intermediaries.

A day before Mt. Gox filed for bankruptcy, Tembusu Terminals Pte set up what may be Singapore’s first machine for buying Bitcoins at a bar in the downtown Boat Quay district.

MAS doesn’t recognise Bitcoin as legal tender and had cautioned individuals about the use of virtual currencies, Tharman Shanmugaratnam, the regulator’s chairman and Singapore’s finance minister, said in Parliament on February 21.

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