Crypto Clients In China Targeted As Singapore Expands Money Laundering Probe

The fight against crypto-related money laundering continues as Singaporean Authorities probe suspected channels. According to a September 21 Bloomberg report, Singapore banks have extended ongoing money laundering investigations to clients of Chinese origin. Amid the probe, they have frozen and seized $1.8 million in crypto assets, cash, and properties since August.

Singaporean Banks Heighten Scrutiny On Overseas Clients’ Accounts

As part of Singapore’s fight against money laundering, banks scrutinize new account openings and transactions with Chinese-born clients. They want to identify those still holding digital currencies or involved in money laundering activities. 

Meanwhile, one of the banks plans to close some accounts belonging to clients from Turkey, Cyprus, Cambodia, Dominica, and Vanuatu. Also, other banks have begun a case-by-case review of accounts belonging to citizens of other countries and blocking funds from such customers.

These investigations affected 10 affluent Chinese individuals whom the police arrested and charged with money laundering violations. The Singaporean police said they confiscated these persons’ properties, cash, and cryptocurrencies.

According to police investigations, these Chinese persons live in Singapore and allegedly operate illegal gambling businesses there. 

The news of the crime and arrests have obscured Singapore’s reputation as a financial hub. Banks with such clients include Julius Baer Group, Credit Suisse, Citigroup Inc., United Overseas Bank, and Overseas-Chinese Banking. 

A spokesperson for the DBS Group Holdings, a Singapore-based stock exchange, commented on the development. He acknowledged that Singapore’s regulatory guidelines mandate all banks to implement anti-money laundering risks to high standards. However, the regulation does not oblige them to deny banking services to clients of specific origin or holding certain passports.

The spokesperson stressed that besides a client’s origin, other risk factors must trigger suspicion or enforcement action.

Singapore’s Strict Crypto Scrutiny

Singapore has taken a hawkish stance on crypto regulation since this year. Bloomberg reported on April 5, citing sources familiar with the matter, that Singapore’s central bank allied with the police to help banks set standard vetting approaches for opening crypto accounts.

Also, in July, the country’s Monetary Authority (MAS) imposed a ban on lending and staking of cryptocurrency by exchanges. The regulator cited concerns regarding the safety of customers’ funds as the reason for its decision. 

Nonetheless, while the country maintains its heightened scrutiny, it has moved further in setting cryptocurrency guidelines. RheMAS has released 190 Major Payment Institution licenses to firms to participate in its interbank payment system tagged Fast and Secure Transfers (FAST). About eleven (11) crypto assets payment firms, including Ripple, were among the companies that received the licenses.

On June 22, Ripple announced that its Singaporean arm, Ripple Markets APAC Pte Ltd, secured in-principle approval for the Major Payment Institution license from MAS. 

Meanwhile, the license issuance attracted criticism. A letter published in the Financial Times accused MAS of unwisely linking virtual assets payment to retail bank deposits by allowing crypto firms to access Singafore’s FAST payment system. However, MAS said it only awards licenses to crypto payment firms with robust anti-money laundering rules.