The Monetary Authority of Singapore (MAS) has increased the risk level for crypto exchange platforms from medium-low to medium-high in an update to the country’s Terrorism Financing (TF) laws. This update is part of Singapore’s broader strategy to prevent terrorist groups from exploiting its position as an international financial, business, and transport hub.
On July 1, the MAS issued an update to the country’s Terrorism Financing (TF) National Risk Assessment (NRA) and National Strategy for Countering the Financing of Terrorism (CFT). The update aims to strengthen safeguards against the misuse of Singapore’s economic openness for terrorist financing purposes.
Crypto exchange platforms, referred to as Digital Payment Token (DPT) service providers, have been reclassified from medium-low to medium-high risk. Cross-border online payments remain at high risk, identified as a potential new channel for terrorist financing activities.
This reclassification comes shortly after a report identified digital payment tokens as high-risk. Singapore’s updated Money Laundering National Risk Assessment (MLNRA) pointed out serious risks and vulnerabilities associated with DPT service providers in the context of Anti-Money Laundering (AML).
The MAS has been actively involved in regulating the digital asset market under the country’s existing laws. Recently, the Singapore regulator expanded the scope of regulated payment services to include digital token service providers, thereby bringing digital assets under user protection laws. This allows the MAS to impose stricter requirements related to AML, Countering the Financing of Terrorism (CFT), user protection, and financial stability on DPT service providers. It also enables DPTs to offer custodial services and crypto transfer services within and across the country.
Singapore is known for its progressive stance on crypto regulations and has a high crypto adoption rate. While the global crypto ownership rate is around 4.2%, Singapore boasts an adoption rate of 11.2%. Under Singaporean regulations, digital currencies are recognized as digital payment tokens (DPTs). The MAS has acknowledged Bitcoin and Ether as cryptocurrencies, giving them the same legal status as other asset types in Singapore.
