The Monetary Authority of Singapore (MAS) has increased the risk level for crypto exchange platforms from medium-low to medium-high under an update to the country’s Terrorism Financing laws.
Singapore put crypto exchange platforms under high risk
On July 1, the Singaporean regulator 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 prevent Terrorist groups and organizations from exploiting Singapore’s economic openness as an international financial, business, and transport hub for TF purposes.
Under the new update, crypto exchange platforms dubbed Digital Payment Token (DPT) service providers have been elevated from Medium-Low to Medium-High risk. Cross-border online payments remain at high risk as they are identified as a potential new channel for TF activities.
The latest increment for crypto platforms comes weeks after a report flagged digital payment tokens as high-risk. According to Singapore’s updated Money Laundering National Risk Assessment (MLNRA), digital payment token (DPT) service providers represent serious risks and vulnerabilities in the context of Anti-Money Laundering (AML).
Singapore leads crypto regulations.
MAS has been actively involved in regulating the digital asset market under the country’s existing regulations. The latest update around crypto platforms comes a couple of months after the Singapore regulator expanded the scope of regulated payment services to include digital token services providers, putting digital assets under the user protection law.
The law allowed MAS to impose stricter requirements relating to Anti-Money Laundering and Countering the Financing of Terrorism, user protection and financial stability on DPT service providers.
It also helped DPTs to provide custodial services and allowed them to offer crypto transfer services within and across the country.
Singapore is considered among the pro-crypto nations with a high crypto adoption rate. While the global crypto ownership rate is around 4.2%, Singapore boasts of an adoption rate of 11.2%. Under Singapore regulations, digital currencies are known as digital payment tokens (DPTs).
MAS has acknowledged Bitcoin (BTC) and Ether (ETH) as cryptocurrencies, giving them the same status as other asset types in Singapore as legal assets.