Singapore’s Monetary Authority (MAS) has raised the risk level for cryptocurrency exchange platforms from medium-low to medium-high under a revision to the country’s Countering the Financing of Terrorism (CFT) laws. The move, effective July 1, is part of Singapore’s efforts to prevent terrorist groups from exploiting the country’s economic openness for financing purposes.
The updated Terrorism Financing National Risk Assessment (NRA) and National Strategy for Countering the Financing of Terrorism aim to curb terrorist financing activities by elevating crypto exchange platforms, or digital payment token (DPT) service providers, to medium-high risk. Cross-border online payments also remain at high risk due to their potential for terrorist financing.
This latest development follows a recent report that identified digital payment tokens as high-risk. According to Singapore’s updated Money Laundering National Risk Assessment (MLNRA), DPT service providers pose serious risks and vulnerabilities in the context of Anti-Money Laundering (AML).
Singapore has been a leader in regulating the digital asset market, with the MAS expanding the scope of regulated payment services to include digital token service providers. This move brings digital assets under user protection laws and allows the MAS to impose stricter requirements on DPT service providers regarding AML and CFT, user protection, and financial stability. It also enables DPTs to provide custodial services and crypto transfer services in the country.
Singapore is known for its high crypto adoption rate, with an adoption rate of 11.2% compared to the global average of 4.2%. Under Singapore regulations, digital currencies are referred to as digital payment tokens, with Bitcoin (BTC) and Ether (ETH) recognized by the MAS as cryptocurrencies with legal status in the country.