The Monetary Authority of Singapore (MAS) has revised the risk assessment for crypto exchange platforms, upgrading their risk level from medium-low to medium-high under updates to the nation’s laws governing Countering the Financing of Terrorism (CFT).
Singapore has increased the risk categorization for crypto exchange platforms
On July 1st, the Singaporean regulatory body released revisions to the Terrorism Financing National Risk Assessment (NRA) and the National Strategy for Countering the Financing of Terrorism, aiming to safeguard against terrorist groups exploiting Singapore’s role as a global financial, commercial, and transportation center for illicit financing.
In this update, crypto exchange platforms, also known as digital payment token (DPT) service providers, have been reclassified from medium-low to medium-high risk. Cross-border online payments remain designated as high risk due to their potential as a new avenue for terrorist financing activities.
This development for crypto platforms follows closely after a recent report identified digital payment tokens as high-risk. According to Singapore’s updated Money Laundering National Risk Assessment (MLNRA), DPT service providers pose significant risks and vulnerabilities in the Anti-Money Laundering (AML) landscape.
Key insights from the MLNRA concerning the AML environment. Source: MAS
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Singapore at the forefront of crypto regulatory frameworks
MAS has been actively engaged in overseeing the digital asset market. This recent update concerning crypto platforms follows just months after the regulator expanded the regulatory purview to include digital token service providers, thereby subjecting digital assets to consumer protection laws.
These regulations empower MAS to impose stringent requirements on DPT service providers concerning AML/CFT measures, consumer safeguarding, and financial resilience. They also enable DPTs to offer custodial and crypto transfer services within Singapore.
Singapore is recognized as a crypto-friendly jurisdiction with a notable adoption rate. While global crypto ownership stands at approximately 4.2%, Singapore boasts an adoption rate of 11.2%. Under Singaporean regulations, digital currencies are categorized as digital payment tokens.
MAS has officially recognized Bitcoin (BTC) and Ether (ETH) as cryptocurrencies, granting them legal tender status in Singapore.
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