FameEX Hot Topics | Singapore's Central Bank Identifies Banking Sector as Highest Money Laundering Risk

According to the Money Laundering Risk Assessment Report by Singapore’s central bank, the banking sector is identified as the highest money laundering risk to the country. The report also highlights risks related to digital assets and cryptocurrencies. To mitigate these risks, the Monetary Authority of Singapore (MAS) has implemented stringent regulatory measures under the Payment Services Act (PS Act).

On June 20, the Monetary Authority of Singapore (MAS) released the “Money Laundering Risk Assessment Report Singapore 2024.” This report outlines Singapore’s ongoing efforts to strengthen its anti-money laundering (AML) framework in response to an evolving risk environment. It offers a comprehensive analysis of Singapore’s primary money laundering (ML) risks, incorporating various qualitative and quantitative indicators related to threats, vulnerabilities, and control measures. The report highlights key ML threats, including cyber-enabled fraud, organized crime, corruption, tax crimes, and trade-based money laundering.

The report identifies the banking sector as posing the highest money laundering risk due to its extensive range of services and the scale of transactions. It states: "The banking sector has been assessed to pose the highest ML risk to Singapore." Banks are commonly exploited for various money laundering typologies, including self-laundering, third-party laundering, and the misuse of corporate and individual accounts for the layering and integration of illicit funds.

Additionally, the report highlights significant risks related to digital assets and cryptocurrencies. It notes that digital payment tokens (DPTs) have become emerging conduits for money laundering. Criminals exploit these tokens through cyber-enabled fraud, ransomware, and darknet market transactions. In response, the MAS has implemented stringent regulatory measures under the Payment Services Act (PS Act) to mitigate these risks.

Digital payment token service providers must obtain licenses and comply with anti-money laundering and countering the financing of terrorism (CFT) requirements. MAS conducts regular thematic inspections and offsite surveillance and has issued guidance papers to enhance industry awareness and control measures. Continuous engagement with the industry through townhalls, outreach sessions, and advisories aims to maintain robust AML/CFT standards in the DPT sector.

In summary, Singapore’s central bank has recognized the banking sector as the highest risk for money laundering while also noting the growing threats posed by digital assets and cryptocurrencies. By implementing strict regulatory measures and maintaining active industry engagement, the MAS is working to enhance Singapore’s AML framework and address these evolving challenges effectively.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.