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Crypto and DeFi cannot circumvent Russia financial sanctions: MAS

The regulator said appropriate measures will be taken for FIs who will breach these sanctions.

The Monetary Authority of Singapore has reaffirmed that financial sanctions on Russia cannot be circumvented through cryptocurrencies or decentralised finance (DeFis) as financial institutions are required to comply with the ordered sanctions regardless of whether transactions are facilitated using traditional financial channels, or through cryptocurrency exchanges or “decentralised finance” protocols.

This was in response to MP for Bishan-Toa Payoh GRC Saktiandi Supaat who asked whether Singapore’s regulation of cryptos and DeFi will prevent sanctioned individuals and companies from using non-traditional forms of finance to circumvent it and whether MAS has plans to introduce or revise its regulations.

MAS said the sanctions by the Singapore government will apply to all FIs in Singapore, including digital payment token (DPT) service providers.

“MAS requires all FIs to ensure compliance with the measures, regardless of whether transactions are facilitated using traditional financial channels, or through cryptocurrency exchanges or “decentralised finance” protocols. To guard against circumvention, these financial measures specifically prohibit DPT transactions that may be used to facilitate any prohibited activity or transaction. In short, FIs will not enable sanctioned parties to use non-traditional forms of finance to bypass the measures,” Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS said.

Shanmugaratnam added that all FIs are required to demonstrate their compliance with the financial measures to MAS and are subject to MAS’ scrutiny and inspection. 

“MAS will take appropriate regulatory actions against FIs found to have breached these financial measures,” Shanmugaratnam said.

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