Crypto Tokens and Services Pose “High” Money Laundering Risks: Singapore MAS

The Monetary Authority of Singapore (MAS) has released a new money laundering risk assessment report, labeling crypto tokens and service providers under “high risk” financial sectors.

“There has been an increase in reported cases involving digital payment tokens (DPTs) and there is a range of ways in which DPTs can be exploited,” the report read.

Singapore saw the most serious, if not the worst case in money laundering (ML) in September 2023. Per reports, cryptos worth $3.8 million was withdrawn from the Binance account of one of the accused in the case, while he was still in remand.

Angela Ang, TRM’s Senior Policy Advisor and former MAS Deputy Director stressed that the magnitude of the case is historic.

“The inclusion of cryptos in laundering efforts show how crypto increasingly features as a component in large financial crime cases.”

In April, MAS tightened its crypto regulatory oversight to encourage the productive use of blockchain technology, while addressing ML risks.

Some of these regulatory amendments have been in development for several years and are intended to bring clarity to key aspects of the crypto ecosystem.

Singapore is Closely Monitoring Crypto Sector Money Laundering Risks

Although risks associated with digital payment token activities in Singapore form only a small percent of global activities, the nation’s authorities are “closely monitoring the risks involving the sector.”

According to the jurisdiction, apart from DPTs, payment institutions providing cross-border money transfer services pose higher money-laundering risk.

“Singapore remains committed to reviewing and putting in place appropriate measures to address the identified risks.”

In April, the MAS introduced changes to tighten rules on AML covering crypto players. This was aimed at imposing user protection and financial stability-related requirements.