Industry Perspectives on Best Practices – Management of Money Laundering, Terrorism Financing and Sanctions Risks from Customer Relationships with a Nexus to Digital Assets

The Monetary Authority of Singapore (MAS) has published a press statement to inform of the availability of best practices concerning the „Management of Money Laundering, Terrorism Financing and Sanctions Risks from Customer Relationships with a Nexus to Digital Assets“. The document was prepared by the Digital Assets Risk Management Group and aims to provide financial institutions (FIs), including banks, holding companies, trust companies, fund management companies, payment institutions, and several others, with fundamental information on
– the various types of digital assets and the basic money laundering (ML) and terrorist financing (TF or FT) risks associated with each one of them;
– the key risks in relation to cryptocurrencies as the aforementioned group identified this type of digital asset to pose the greatest ML and TF risks and risks to violate sanction provisions;
– the ways customers may engage with cryptoassets (types of customer nexus to cryptocurrencies);
– the key risks faced by FIs when engaging in cryptoassets;
– potential red flags that may indicate possible money laundering or the financing of terrorism;
– best practices as regards the onboarding of Digital Payment Token Service Providers (DPTSPs), FIs, and Non-Bank FIs (NBFIs); and
– situations where enhanced due diligence measures may be warranted.
Furthermore, the document contains illustrative case studies which present „real life“ situations which FIs may encounter in their daily operations and presents capabilities of tools in the area of „On-Chain Screening Technologies“ which may help FIs comply with their due diligence obligations as regards digital asset customers or engagements are concerned.