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03/07/24
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Singapore’s Financial Authority Updates Laws Related to Digital Assets
Two days ago, Singapore’s central bank and financial regulatory authority published an update to the Terrorism Financing National Risk Assessment (NRA) and National Strategy for Countering the Financing of Terrorism, requiring digital payment token (DPT) service providers to increase risk level from medium-low to medium-high.
This is towards preventing terrorist groups and organizations from leveraging the economic openness of Singapore as a global financial, business and transport hub to finance terrorism. The authorities discovered that cross-border online payments are a potential new channel to finance terrorism, so they are at high risk.
“Features that enhance anonymity, such as mixers, tumblers, Internet Protocol anonymisers, and privacy coins make DPTs more appealing for TF, as they enable terrorists and their financiers to conceal their identities, counterparties, and physical locations,” reads the report.
According to the Monetary Authority of Singapore (MAS), virtual assets or currencies feature cross-border capability with the ability to facilitate high-value transactions quickly, making DPTs a more attractive option to raise or move assets relative to conventional methods. These features make it difficult for the authorities to trace and detect DPT transactions related to terrorism financing activities.
About two weeks ago, the MAS released a report noting the remarkable risks and vulnerabilities presented by digital payment token (DPT) service providers in the Anti-Money Laundering (AML) landscape. The number of money laundering cases involving DPTs, and various exploitation methods have increased.
“There is a growing risk of virtual assets being utilised by international terrorist groups. As a result, the risks associated with Digital Payment Token (DPT) service providers have been elevated from Medium-Low to Medium-High risk, necessitating increased industry vigilance against this evolving threat,” said the MAS.
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