Singapore’s latest Money Laundering National Risk Assessment (NRA) has raised concerns about the vulnerabilities posed by digital payment token (DPT) service providers. The 126-page report, which updates the 2014 report and includes new risk sectors, identifies DPT service providers and precious stone and metal dealers as areas of concern. The banking industry, particularly wealth management, is highlighted as having the highest money laundering risks. DPT service providers, also known as virtual asset service providers, are considered a high-risk category within the financial sector. The report reveals an increase in reported cases involving DPTs and various exploitation methods. Although Singapore has a small share of global DPT activities, authorities closely monitor the associated risks. Other high-risk sectors in the financial industry include payment institutions offering cross-border money transfer services and external asset managers. The NRA report, a collaboration between Singapore’s supervisory and law enforcement agencies, the Financial Intelligence Unit, and feedback from private sector entities and foreign authorities, shows that the main money laundering threats in Singapore come from fraud, organized crime, corruption, tax crimes, and trade-based money laundering. Typical money laundering methods involve concealing illegal funds in Singaporean bank accounts, using fictitious companies, and investing in assets like real estate or precious metals. Singapore’s status as an international financial hub and its economic openness make it susceptible to money laundering risks, as criminals exploit the country’s financial and business infrastructure to launder or transfer illicit funds. The conversion of illicit funds into assets like real estate, digital payment tokens, or precious metals also poses significant threats. To address these concerns, the Monetary Authority of Singapore (MAS) announced in April that it would expand the scope of regulated services related to digital payment token service providers through amendments to the Payment Services Act (PS Act). Additionally, the approval of spot Bitcoin exchange-traded funds (ETFs) in the United States has led to an increase in Singaporeans viewing Bitcoin favorably. According to a report from the digital currency exchange Independent Reserve, 39% of Singaporeans now have a more positive view of Bitcoin. The study also found that Singaporean cryptocurrency investors are becoming more experienced, with more than half having been in the market for over three years. Their portfolios are also becoming more diverse, with 16% holding six or more different cryptocurrencies. This year, 64% of crypto owners reported making profits, while only 10% experienced losses. Another report by Seedly and Coinbase found that 57% of respondents currently hold digital assets.
