In general, Singapore is a jurisdiction that supports cryptocurrencies. In short, everything is legal in Singapore. Anyone can engage in cryptocurrency-related activities as long as they do not exceed the normal limits of financial regulation. In this article, we have summarized the relevant laws and regulations for you.
Are cryptocurrencies legal in Singapore?
Yes. Cryptocurrencies are virtual goods as defined in Singapore, but they are not legal tender, meaning they are not money and therefore not regulated as currency.
In 2019, the Singapore Court of International Trade set a precedent, in which Justice Simon Thorley IJ held that “cryptocurrencies are not legal tender in the sense of a regulated currency issued by the government, but have the essential quality of intangible property as a thing of determinable value.”
There are no controls or restrictions on foreign currencies in Singapore. Although the currency used is the Singapore dollar, most banks in Singapore also offer US dollar accounts.
Is it legal to mine cryptocurrencies in Singapore?
Yes, there are no regulations in Singapore in this regard. However, electricity is very expensive here and it is quite hot in Singapore, which probably makes it the worst place to mine Bitcoin. But yes, it is legal.
You have to pay 17% tax on that income. Probably nobody cares that you only have one computer at home, but the principle is that it is taxed as a source of income.
How much is the tax on cryptocurrencies in Singapore?
First of all, there is no capital gains tax in Singapore. Companies and individuals who buy cryptocurrencies in Singapore and benefit from the appreciation of their assets pay no sales tax.
The income tax rate in Singapore is 17%. Therefore, if your business or profession involves trading bitcoin for profit, you will be taxed at 17%. Basically, with cryptocurrencies, there is a gray area between what is trading and what is investment (for capital gains).
Also, Bitcoin (or Ether, which are digital tokens) can be used to make payments in Singapore. Although there is a 7% tax on goods and services, the use of digital tokens as payment for goods and services is tax-free. Therefore, the purchase and sale of cryptocurrencies are generally not subject to GST. However, stable coins may be taxed if the intention is to avoid a normal transaction subject to GST.
How can I buy cryptocurrencies in Singapore?
This is an interesting question. First, Singapore regulations generally consider the buying and selling of cryptocurrencies to be a digital payment, so it falls under the Payment Services Act and any company offering cryptocurrency trading or exchange services must have a license. Many exchanges, such as Binance, have these (temporary) licenses, but they’ re only licensed to provide limited cryptocurrency trading services in Singapore. For example, Binance.Sg only offers spot trading services and not investment or futures products. For most other exchanges in Singapore, the situation is similar and there is a relatively low limit on the amount one can buy per year.
However, it has been discussed and planned – there will probably be a national cryptocurrency exchange in Singapore soon. DBS, Singapore’s largest bank, announced a plan last December, and some detailed articles were published on the bank’s website.
Going back to the above, since there are no exchange controls in Singapore, you can always send US dollars from a bank in Singapore to another bank in the US or Europe (via SWIFT). And then spend the money in another country is not regulated. For example, the minting of USDT is not regulated by Singapore.
Can I raise money in Singapore with cryptocurrencies, also known as ICOs?
The answer is no. In Singapore, raising money from the public is not allowed unless it is registered as an initial public offering (or similar to a public debt offering). Therefore, an ICO is not allowed.
However, it is always possible to set up a company to conduct cryptocurrency-related activities and receive angel or venture capital investment. Singapore makes no distinction between cryptocurrency-related activities and other financial activities – regulations apply.
Can I raise money in Singapore to invest in cryptocurrencies?
Singapore is a financial center that attracts many fund managers and family offices. So yes, it is theoretically possible to set up a fund and invest in cryptocurrencies. In practice, Singapore’s regulator, the Monetary Authority of Singapore (“MAS”), has not yet authorized a fund to invest exclusively in cryptocurrencies.
The MAS has only authorized a company that provides cryptocurrency custody services in Singapore.
Yet, a fund can be set up to invest in cryptocurrency products in traditional markets. For example, it can invest in the products listed by Grayscales. Three Arrows Capital has its headquarters in Singapore.
Other regulations and issues.
Singapore has fairly strict currency regulations, so cryptocurrency investments may be subject to scrutiny by the country’s banks and accountants in terms of AML (anti-money laundering) and CFT (terrorist financing). It is important to verify the sources of crypto capital and monitor the movement of funds. Ideally, setting up a custodian company for cryptocurrency investments may be a good idea for accounting and compliance purposes.