25 ASIAN LEGAL BUSINESS – JUNE 2024 WWW.LEGALBUSINESSONLINE.COM WHITE-COLLAR CRIME Singapore is also pushing heavily against the use of digital payment tokens (DPT) and cryptocurrencies to illicitly park and transfer money through its banking systems. Most recently, the country amended its Payment Services Act in April to include user protection and financial stability requirements. Under the new rule, DPT service providers must update their license applications, ensure their AML/counter-terrorism financing (CFT) controls meet the updated norms, and complete an external audit to continue operations post-January 2025. Singapore’s regulators have also increased AML/CFT compliance requirements across various sectors. Ang points to new AML/CFT requirements introduced in June 2023 for property developers in relation to the need to develop and implement internal policies and controls to manage and mitigate ML/TF risks. In March 2024, amendments were proposed to enhance the regulatory regime for corporate service providers (CSPs), requiring all CSPs in Singapore to be registered and comply with AML/CFT obligations. New AML/ CFT requirements were also imposed on digital payment token service providers, including cryptocurrency trading firms and exchanges, recently in April 2024. Hong Kong has matched and, arguably, even gone ahead of Singapore when it comes to AML/CFT regulation and enforcement. In 2023, the SFC initiated and concluded more than 10 consultations, stepped up enforcement action to combat internal control failures, insider dealing, ramp-and-dump and other types of misconduct, and published a flurry of new circulars and guidelines. Significant regulatory developments were also seen in emerging areas, such as ESG and virtual assets, and efforts were made to reform or refine long-standing regulations and practices relating to insider dealing and market soundings. Martin Rogers, chair of U.S. firm Davis Polk’s Asia practice, says Hong Kong is a good model for how governments must tackle cryptocurrencyrelated financial crime. “The way forward domestically for the crypto industry should be to embrace regulation and licensing and then impose balanced AML requirements. Hong Kong is a good model for this, with its Virtual Asset Service Provider regulatory framework including KYC/ AML requirements as a core element. It’s worth emphasising, though, that the AML requirements need to be tailored to account for the nature of the global cryptocurrency markets,” Rogers says. “Domestic laws should cover not just AML and CTF but also cybersecurity. This is an area where Hong Kong is still in the process of catching up, currently lacking sufficient cybercrime offences (and as yet any legislation to protect critical information infrastructure, although this is in the works),” Rogers adds.
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