Singapore Banks Under Scrutiny Sequel To Crypto Related Crimes

Highlights

Singapore seizes over $1.1 billion from accounts linked to crypto-related money laundering involving 10 convicted individuals and 17 suspects.
Government report highlights the high money laundering risks in the banking sector, with detailed observations of laundering techniques and vulnerabilities.
MAS introduces significant amendments to the Payment Services Act, enhancing AML and CFT measures to safeguard the financial sector.

Singapore’s banking system, with over 150 banks, is under scrutiny following a major crypto-related money laundering scandal. Authorities seized more than $1.1 billion from accounts linked to 10 convicted individuals and 17 suspects who remain at large. The seized assets included cash, cryptocurrencies, and luxury items such as real estate, jewelry, and luxury bags.

This scandal has highlighted significant vulnerabilities within Singapore’s financial system, prompting the city-state to tighten regulations on family offices and hedge funds. Additionally, there has been an increase in the closure of dormant firms as part of efforts to combat money laundering risks.

Singapore’s Government Report and Sector Vulnerabilities

Singapore is taking a hard look at money laundering risks within its banking sector. The government recently released an extensive 126-page report analyzing these risks, as the city-state aims to attract ultra-wealthy individuals and position itself as a global financial hub.

However, this ambition has made Singapore vulnerable to being exploited for laundering illicit funds from crimes committed abroad. The report detailed various money laundering techniques employed, such as using bank accounts, payment services, shell companies, and other complex structures.

Banks were identified as particularly susceptible due to the widespread use of online financial services facilitating easy electronic transfers. Authorities seized over $1.1 billion from bank accounts linked to 10 convicted Chinese nationals and 17 other suspects still at large.

The illicit assets included cash, cryptocurrencies, real estate, and luxury goods like precious stones, jewelry, watches, and high-end bags. To combat these risks, Singapore is now demanding more information from family offices and hedge funds operating in the country.

Also Read: Binance Faces $2.2M Fine From India’s FIU

Singapore’s Crypto Payments Amendment and Future Measures

Singapore’s Monetary Authority (MAS) debuts their major amendments that have been made to the Payment Services Act. The revised Act broadens its scope to cover digital payment tokens (DPTs) and bolster user protections. Effective April 4th, 2024, the new regulations grant MAS oversight over DPT custodial services, account transfers, and cross-border money transfers.

The amendments also empower MAS to enforce stringent anti-money laundering and counter-terrorism financing requirements on DPT service providers to regulate crypto exchanges in Singapore. Companies engaged in DPT activities must now notify MAS within 30 days and apply for a license within six months to continue operations under transitional arrangements.

These regulatory changes bring much-needed clarity and accountability to Singapore’s crypto landscape. By mandating adherence to strict financial crime prevention measures, MAS enhances the integrity of the sector. The new rules mitigate risks associated with illicit activities while fostering trust among investors and businesses, cultivating a more secure and transparent financial environment.

Also Read: ZK Price Plummets 5% Amid $113M zkSync Token Airdrop Sell-Off

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