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. The reminder comes after researchers established that pro-Russia activists have raised millions of dollars in digital assets to support its war effort.
Singapore Says Measures Targeting Russia Apply to All Financial Institutions, Including Crypto Exchanges
Compliance with financial sanctions on Russia is a must for licensed cryptocurrency exchanges, the Monetary Authority of Singapore (MAS) commented for local media on Monday. The statement comes after recent studies found that pro-Russian groups have received crypto donations worth millions of U.S. dollars to fund Russian military operations in Ukraine.
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. Responding to queries from Channel News Asia (CNA), a TV channel owned by the national broadcaster Mediacorp, the bank insisted:
These measures apply to all financial institutions in Singapore, including digital payment token service providers (DPTSPs) licensed to operate in Singapore.
The regulator did not specify if it had received any reports of exchanges being used to channel cryptocurrency to pro-Russian groups. Nevertheless, the authority emphasized that crypto service providers must have robust controls in order to avoid dealing with sanctioned banks and banned activities.
The MAS pointed out that these platforms should perform customer due diligence to verify the identities of their customers and screen their transacting counterparties. DPTSPs are also required to monitor for potential attempts to evade the prohibitions such as the use of mixers and tumblers, the central bank elaborated.
A report released by the blockchain forensics firm Chainalysis in July, identified more than 50 organizations that had collected over $2.2 million worth of cryptocurrency to support the Russian side in the Ukraine war. Andrew Fierman, head of sanctions strategy at the company, now told CNA that crypto donations, used to buy anything from drones to bulletproof vests, have already reached $4.8 million.
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 organizations and activists have already been placed under Western sanctions.
While Singapore has welcomed the adoption of cryptocurrencies as they play a supporting role in the digital asset ecosystem, the city-state is also seeking to reduce risks for retail crypto investors through tighter regulations proposed last week by the MAS. Among the suggested measures are a risk awareness assessment for investors and a ban on the use of borrowed funds for crypto trading.
Do you expect Singapore to take additional measures to prevent sanctions evasion through crypto-platforms licensed in its jurisdiction? Tell us in the comments section below.