Singapore’s Monetary Authority (MAS) has upgraded the risk level for crypto exchange platforms from medium-low to medium-high under an amendment to the nation’s Terrorism Financing laws. The move comes as part of Singapore’s efforts to prevent terrorist groups from exploiting the country’s financial and business infrastructure for nefarious activities.
The MAS issued an update to the Terrorism Financing (TF) National Risk Assessment (NRA) and National Strategy for Countering the Financing of Terrorism (CFT) on July 1. The goal of the update is to safeguard against the potential misuse of Singapore’s economic openness by terrorist organizations. As part of the update, crypto exchange platforms, known as Digital Payment Token (DPT) service providers, have been reclassified as a medium-high risk. Cross-border online payments have also been identified as a high-risk area for terrorism financing activities.
The decision to increase the risk level for crypto platforms follows a report that highlighted digital payment tokens as high-risk. The updated Money Laundering National Risk Assessment (MLNRA) noted that DPT service providers pose serious risks and vulnerabilities in the context of Anti-Money Laundering (AML).
MAS has been actively involved in regulating the digital asset market under the country’s existing regulations. A few months prior to the latest update, the Singapore regulator expanded the scope of regulated payment services to include digital token services providers, which brought digital assets under user protection laws. This move allowed MAS to enforce stricter requirements related to AML, user protection, and financial stability on DPT service providers.
Singapore is known for its pro-crypto stance, with a high adoption rate of digital currencies. Under Singapore regulations, digital currencies are referred to as digital payment tokens (DPTs). MAS has recognized Bitcoin (BTC) and Ether (ETH) as cryptocurrencies, granting them the same legal status as other assets in Singapore.
Overall, Singapore’s regulatory efforts are aimed at ensuring the safety and security of the digital asset market while also fostering a conducive environment for innovation and growth.