The Monetary Authority of Singapore (MAS) has reiterated that cryptocurrency exchanges need to conform to restrictions on Russian users imposed over Moscow’s invasion of Ukraine. Researchers discovered that pro-Russian activists had raised digital assets worth millions to aid their war efforts.
Singapore Declares That Measures Targeting Russia Are Effective for All Financial Institutions, including Crypto Exchanges
For licensed cryptocurrency exchanges to be permitted, compliance with Russia’s financial sanctions is a requirement. The Monetary Authority of Singapore commented on Monday. This statement follows recent research that found pro-Russian groups had received cryptocurrency donations in the millions to support Russian military operations.
Following Russia’s invasion in late February, MAS introduced in March financial measures aimed at designated Russian banks, entities, and activities, including fundraising benefiting the Russian government. Answering questions from Channel News Asia (CNA), an independent TV channel, the bank said:
These regulations apply to all Singapore financial institutions, including DPTSPs (digital payment token service providers) that are licensed to work in Singapore.
It was not clear if the regulator had been notified of any exchanges that were used to send cryptocurrency to proRussian groups. However, the regulator stressed that cryptocurrency service providers need to have strong controls to prevent dealing with banned banks or other prohibited activities.
The MAS emphasized that such platforms need to conduct customer due diligence in order to confirm the identity of their customers as well as screen any counterparts they transact with. According to the central bank, DPTSPs will also be required to watch for possible attempts to avoid prohibitions on the use of tumblers or mixers.
Chainalysis, a blockchain-forensics company released a report in July that identified over 50 organisations that have collected more than $2.2 million in cryptocurrency in support of the Russian side in Ukraine’s war. CNA has been informed by Andrew Fierman (head of the sanctions strategy), that crypto donations were used to pay for everything from bulletproof vests to drones.
According to research published in October by another crypto tracing platform, TRM Labs, as of Sept. 22 the pro-Russian groups had raised $400,000 since the start of Russia’s invasion on Feb 24 this year. Some of these activists and organizations have been taken under Western sanctions.
Singapore is welcoming the use of cryptocurrencies, as they are an important part in the ecosystem. However, it also wants to lower the risks faced by retail investors. This was done through stricter regulations last week by MAS. A risk assessment is recommended for investors. Also, a ban on borrowing funds to trade in crypto.
Are you expecting Singapore to adopt additional measures to stop sanctions evasion via crypto-platforms that are licensed within its territory? Leave your comments below.
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