Best ways to Purchase Crypto in Singapore

Is it legal to buy Bitcoin and other Cryptocurrencies in Singapore?

Despite the government of Singapore’s hesitation and suspicion over the country’s ongoing crypto-boom, there are no restrictions on purchasing, selling, trading, or offering other services related to cryptocurrencies. More importantly, it needs to be understood that cryptocurrencies are not accepted as legal tender. 

• Each cryptocurrency may be treated as either an unregulated digital token that is only used for utility purposes,
• or as a regulated product like e-money, a digital payment token (“DPT”), or a capital markets product (including securities).

A person who conducts the business of offering a payment service in relation to a cryptocurrency would need to obtain a license under Singapore’s Payment Services Act of 2019 (PSA), as a cryptocurrency may fall under the definition of “e-money” or “digital payment token.” of 2019 (PSA).

The Singaporean government continues to take a pragmatic, realistic, and customized approach to cryptocurrencies. While the government recognizes the economic and social potential of cryptocurrencies and works to create a supportive regulatory environment for their adoption within Singapore’s financial system, it is also acting with extreme caution by attempting to identify the risks associated with them, such as those related to consumer protection, anti-money laundering, and counter-terrorism financing, and then managing these risks in a proportionate manner, including through regulatory oversight.

The Monetary Authority of Singapore (MAS), Singapore’s central bank, has not produced or backed any cryptocurrencies for retail use. However, given that cryptocurrencies have a wide range of attributes, characteristics and features, Singapore tries to find a more reasonable regulation for these. Even though cryptocurrencies have a wide range of qualities, traits, and features, Singapore tries to come up with a more reasonable regulation for them. In order to determine whether and how such activities should be regulated under Singaporean law, a number of regulations have been put in place, including the requirement that before engaging in any crypto-related activities in Singapore, one obtains a legal permit from a Singapore law firm.

Singapore does not forbid the use of cryptocurrencies that share characteristics with goods covered by Singaporean law, but parties engaging in business related to such cryptocurrencies must follow all relevant legal requirements. Subject to compliance with other general laws of Singapore, parties may engage in business activities related to cryptocurrencies that do not display the characteristics of the products that are governed by Singapore law.

The type of activity being conducted determines how much cryptocurrency is taxed in Singapore. The taxability of the money raised through an initial coin offering (ICO) is dependent on the kind of coin that is being issued, according to the Inland Revenue Authority of Singapore’s e-Tax Guide on Income Tax Treatment of Digital Tokens. Generally speaking, the ICO proceeds will be taxed if the coin is a payment token and is treated as trading stock. The ICO proceeds would represent consideration for the service and would be taxable when the services are rendered if the coin is a utility token and the issuer is required to provide a service in the future. If the coin is a security token, the ICO procedures would be regarded as those resulting from the issuance of investment assets and would not be taxable because they are capital in nature.

The MAS has put in a lot of effort to make sure Singapore’s laws are up to date with developments in the global cryptocurrency market and take into account the risks and opportunities these developments may bring.