Singapore Fines Nine Banks S$27.5 Million for AML Failures

Singapore has taken a significant step in its fight against money laundering by fining nine major financial institutions a total of S$27.5 million (US$21.5 million) for failures in anti-money laundering (AML) controls. This action concludes a S$3 billion money laundering scandal that began in 2023, marking one of the largest financial enforcement moves in the city-state's history. The Monetary Authority of Singapore (MAS) confirmed the penalties, which were levied against global banks such as Credit Suisse, UBS, Citibank, UOB, Julius Baer, LGT Bank, and asset manager Blue Ocean.

The scandal first came to light in August 2023 when police conducted raids on multiple properties and arrested ten Chinese nationals linked to organized criminal groups. Authorities discovered billions in illegal funds tied to luxury real estate, cash, and cryptocurrencies. The individuals involved were later sentenced to prison terms ranging from 13 to 17 months, deported after serving their time, and permanently banned from returning to Singapore.

Among the banks penalized, Credit Suisse’s Singapore branch received the largest fine of S$5.8 million due to “poor or inconsistent implementation of AML controls.” Other institutions, including UBS, Citibank, and UOB, were also fined for similar lapses. UOB, Singapore’s third-largest bank, has already taken corrective steps to strengthen compliance. MAS has also issued prohibition orders lasting up to six years against four individuals linked to the case. This regulatory action is the most serious since 2016, when MAS shut down BSI Bank over its role in the 1MDB scandal.

While the focus has been on traditional banks, the involvement of cryptocurrencies in the scandal has brought the digital asset sector into the spotlight. Some of the seized assets were in cryptocurrencies, highlighting the need for stronger compliance in the crypto space. Singapore has responded by tightening crypto regulations. Under new rules that took effect in June, crypto firms offering overseas services must be licensed by June 30, 2025. Retail investors are banned from using credit or receiving incentives, and transactions over SGD 1,500 require full ID checks under the Travel Rule. Additionally, DeFi frontends and wallets that serve retail users or earn from token-based services may now fall under MAS oversight.

This crackdown by Singapore serves as a warning to both banks and crypto firms about the importance of financial integrity. As cryptocurrencies become more embedded in the global financial system, these regulations are not just for banks anymore. The MAS is building a system where trust is paramount, and the results of this crackdown will be closely watched. The case underscores the need for robust compliance frameworks and advanced technologies to detect and prevent money laundering activities. Financial institutions must remain vigilant and adapt to new threats to ensure the integrity of the financial system.