Singapore tightens noose on crypto to stem terror financing

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The Singapore has tightened its noose on crypto currency regulations.

The country’s monetary authorities increased the risk rating for cryptocurrency exchanges from medium-low to medium-high as part of an update to its laws on Countering the Financing of Terrorism (CFT).

This is to prevent terrorist groups from exploiting Singapore’s position as a global financial hub.

The monetary authorities recently issued a revised Terrorism Financing National Risk Assessment (NRA) and updated its National Strategy for Countering the Financing of Terrorism.

The update highlights the growing concern over digital payment token (DPT) service providers and their potential role in terrorist financing.

The latest assessment follows a recent report identifying digital payment tokens as high-risk.

The Money Laundering National Risk Assessment (MLNRA) noted significant vulnerabilities in the context of Anti-Money Laundering (AML), especially concerning DPT service providers.

This regulatory shift comes as part of Singapore’s broader effort to tighten control over the digital asset market.

Earlier this year, the authorities expanded its regulatory scope to include digital token service providers, enhancing user protection and financial stability.

This move allows them to impose stricter AML and CFT requirements on these platforms.

Despite the increased regulatory scrutiny, Singapore remains a pro-crypto nation, boasting a high crypto adoption rate of 11.2%, significantly above the global average of 4.2%.

Digital currencies, including Bitcoin and Ether, are legally recognized in Singapore and are referred to as digital payment tokens.