Ooops, Singapore does a U-turn with new stance on Bitcoin

It’s showtime for Bitcoin exchange operators.

While Bitcoin operators in Singapore are driving at a full speed to lead the big race to revenue, someone finally hits the brakes. Last week, the Monetary Authority of Singapore announced that it will regulate virtual currency intermediaries in Singapore to address potential money laundering and terrorist financing (ML/TF) risks.

In a release, MAS said virtual currency transactions, given their anonymous nature, are particularly vulnerable to ML/TF risks. To address this, MAS will introduce regulations to require virtual currency intermediaries that buy, sell or facilitate the exchange of virtual currencies for real currencies to verify the identities of their customers and report suspicious transactions to the Suspicious Transaction Reporting Office.

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

MAS also noted that its move will make Singapore one of the first countries in the world to regulate virtual currency intermediaries for ML/TF risks.

But despite the potential impacts on Bitcoin transactions by these new rules, some operators remain unfazed.

According to Zann Kwan, spokesperson at Bitcoin Exchange, the regulations from MAS have been long-awaited.

“We have been touching base with MAS before our launch. This is a positive development for the Bitcoin community. Our current machines are equipped with KYC functionalities,” she said.

Zann also noted that while Bitcoin in Singapore is still in its infancy, the adoption of said virtual currency as a payment mode is gaining traction among merchants in Singapore.

“The response to our bitcoin vending machine has exceeded our expectations with a line forming on the day of launch,” she said.

Meanwhile, Luv Khemani, spokesperson at Bitcoin exchange FYB-SG, said “in the short term, introduction of regulations will increase costs for Bitcoins businesses and consumers.”

The introduction of these rules came after Bitcoin suffered several blows this year. Earlier, Tokyo-based company Mt. Gox filed for bankruptcy after it has reportedly lost hundreds of millions of dollars worth of Bitcoin. Meanwhile, the community of startups mourned when American Bitcoin exchange CEO was found dead in her apartment in Singapore.

But in spite of these, Bitcoin operators in Singapore are quick to rub out any issue haunting the virtual currency’s local landscape.

One Bitcoin operator stealing the limelight is Tembusu Terminals, one of the first companies to install Bitcoin ATMs in Singapore. Recently, Tembusu has closed its seed funding round after being valued at over S$5.1m. The seed funding raised amount to over S$300,000 and will form the bulk of the working capital required for the fledgling start-up to fulfill its outstanding machine orders on time.

Unlike the Mt Gox brouhaha, Jarrod said that his company does not hold onto sizeable customers' deposits of funds for protracted periods

“We are essentially an over-the-counter service provider, a vending machine literally. Using the analogy of a soft drinks vending machine, if there are cans of drinks in stock, the machine will sell. If there aren't anymore cans in stock, the machine will be out of service. If the customers get back the wrong change, contact technical support with their proof of purchase. It really is as simple as that,” he said.