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MAS Reminds Crypto Exchanges To Comply with Financial Sanctions Against Russia

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The Monetary Authority of Singapore (MAS) has issued a statement aimed at licensed digital payment token service providers (DPTSPs), reminding them of their obligation to comply with financial sanctions against Russia. Responding to a query from Channel News Asia, the MAS emphasized that DPTSPs must have “robust controls” to avoid dealing with sanctioned banks and prohibited activities.

In March 2022, the Singapore Ministry of Foreign Affairs formally released the country’s sanctions against Russia, focusing on export controls of military and technological goods and financial measures against Russian banks and activities. In addition to fiat transactions, Singapore’s targeted economic sanctions cover all transactions with Russian entities involving cryptocurrencies, including payment and settlement of dealings related to digital assets, such as non-fungible tokens (NFTs). 

Pro-Russia Crypto Donations

MAS’ statement follows research by Chainalysis that revealed pro-Russian military groups had raised over $2.2 million in crypto to fund Moscow’s war with Ukraine and avoid sanctions. In the report, Chainalysis notes that 54 volunteer groups used social media to spread disinformation and crowdfund military purchases, such as drones, weapons, bulletproof vests, and communication devices. 

Head of sanctions strategy at Chainalysis, Andrew Fierman, told Channel News Asia that the firm “can’t say for sure” if DPTSPs in Singapore have been utilized to donate to these volunteer groups. However, he noted that since the groups have public cryptocurrency wallets, anyone with access to cryptocurrency “could conceptually make a payment.”

Singapore’s Crypto Hub Ambitions

Throughout 2022, authorities in Singapore have taken several steps to cement its position as a key player in the crypto business. From the new Financial Services and Markets (FSM) Bill addressing regulatory weaknesses to the MAS granting major payment institution licenses to digital payment token services, Singapore has shown its ambition to enhance its global reputation as a regulated destination for crypto services. 

In addition to ongoing plans to consult the public on stablecoin regulation, on October 26, MAS proposed that retail investors undertake a risk awareness assessment before being allowed to trade cryptocurrencies. If passed into law, DPTSPs will be required to provide relevant risk disclosures to enable retail consumers to make informed crypto trading decisions. More information on MAS’ proposed measures for DPTSPs can be found in this consultation paper. Firms should note that comments on the proposals must be submitted by December 21, 2022 

Key Takeaways

Compliance staff should ensure they are familiar with their compliance obligations relating to Singapore’s financial sanctions against Russia. Firms may consider reviewing their ongoing monitoring measures to ensure their system can detect and prevent transactions to or from sanctioned persons, entities, and geographies. These measures should also be calibrated to identify transactions that use anonymity features (such as tumblers and mixers) to obscure the identities of counterparties.


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Originally published 04 November 2022, updated 04 November 2022

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