Singapore’s Money Laundering National Risk Assessment (MLNRA) has flagged digital payment token service providers as a high-risk category in the Anti-Money Laundering (AML) landscape.
The comprehensive 126-page report identifies new risk sectors not included in the previous report, published in 2014. These consist of precious stone and metal vendors and DPT service providers.
The sector with the most significant money laundering risk is the finance sector, which encompasses wealth management. Banks are more vulnerable to criminal exploitation as a result of their involvement in the facilitation of high-volume transactions and the provision of services to high-risk consumers.
Virtual asset service providers, or DPT service providers, are a high-risk category within the financial sector. The MLNRA emphasizes a rise in reported money laundering cases involving DPTs and various exploitation methods.
The authorities closely monitor the associated risks despite Singapore’s relatively minor portion of global DPT activities. Payment institutions that provide cross-border money transfer services and external asset administrators are among the other high-risk financial industry sectors.
Singapore’s risk assessment report stated that its primary money laundering threats were organized crime, corruption, tax offenses, trade-based money laundering, and cyber-enabled fraud.
Typical money laundering methods involve:
- The concealment of unlawful funds in Singapore bank accounts.
- The use of fictitious companies.
- The investment in valuable assets such as real estate or precious metals.
The MLNRA report integrates feedback from private sector entities and foreign authorities and insights from Singapore’s supervisory and law enforcement agencies, including the Financial Intelligence Unit.
Money laundering in Singapore
Singapore’s economic openness and status as an international financial center make it susceptible to money laundering risks. Criminals utilize the financial and business infrastructure of the nation to either launder or transfer illicit funds.
Furthermore, the report indicates that converting illicit funds into assets such as real estate, digital payment currencies, or precious metals presents substantial risks.
In April, the Monetary Authority of Singapore declared it would amend the Payment Services Act to broaden the scope of regulated services associated with digital payment token service providers.
