The Monetary Authority of Singapore (MAS) has introduced significant amendments to the Payment Services Act to enhance Anti-Money Laundering (AML) on 20 June 2024. The move came after Singapore’s banking sector came under increased overall scrutiny following a $1.1 billion crypto-related money laundering scandal.
In a public announcement, MAS revealed that within the financial sectors, a higher risk sector of note would be the digital payment token (DPT) services providers (or virtual assets service providers).
“There has been an increase in reported cases involving DPTs and there is a range of ways in which DPTs can be exploited,” said MAS. “Hence, while DPT activities in Singapore form a small portion of global activities, Singapore authorities are closely monitoring the risks involving the sector.”
Going ahead, financial institutions will face stricter compliance requirements.
Singapore banks in the spotlight after $1.1 billion crypto money laundering scandal. Calls for tighter financial oversight intensify. 💼💸 #Singapore #Crypto #CryptoNews #BTC #cryptoscam pic.twitter.com/t13QsOutV7
— Trading Copter (@TradingCopter) June 20, 2024
Crypto Scam Reveals Vulnerabilities Within Singapore’s Financial System
The Singaporean authorities seized over $1.1 billion dollars from accounts linked to 10 convicted individuals and 17 suspects who remain at large.
The seized assets included cash, cryptocurrencies, real estate, and luxury items such as jewellery, watches, and high-end bags.
In response to this massive scam, MAS has taken measures to enhance AML and Countering the Financing of Terrorism (CFT) measures within the financial sector, including more rigorous customer due diligence and reporting obligations.
Furthermore, the MAS has increased vigilance of family offices and hedge funds operating in the country.
There has also been a notable increase in the closure of dormant companies to mitigate AML risks.
The Singaporean government’s extensive report on analyzing AML risks within the banking sector also emphasizes the importance of international cooperation.
Singapore is working with other countries and international organizations to share information and coordinate efforts to tackle money laundering.
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Singapore is one of the main financial hubs in Asia. According to MAS, Singapore’s position as an international financial centre and as a trading and transit hub with a highly externally oriented economy exposes it to the risks of criminals.
Furthermore, the MAS is expected to introduce additional measures to enhance transparency and accountability within the financial sector. These measures may include stricter licensing requirements for financial institutions, enhanced monitoring and reporting mechanisms, and increased penalties for non-compliance.
