Singapore describes digital payment tokens as high risk in the anti-money laundering landscape

Singapore said digital payment token (DPT) service providers, also known as virtual asset service providers, are emerging as a high-risk category within the financial sector.

Singapore's updated National Money Laundering Risk Assessment (NRA) has highlighted significant risks in the anti-money laundering (AML) landscape, particularly in the financial sector, where digital payment providers (DPTs) pose increasing vulnerabilities.

The comprehensive 126-page report identifies new risk sectors not included in the last report, released in 2014. This includes virtual asset service providers and gems and metals traders.

The banking sector, including wealth management, has been identified as posing the highest money laundering risk. Banks are more vulnerable to criminal exploitation because of their role in facilitating large volumes of transactions and serving high-risk customers.

In the financial sector, digital payment token (DPT) service providers, also known as virtual asset service providers, stand out as a high-risk category. The assessment highlights an increase in reported cases involving digital payment token service providers and a variety of exploitation methods.