As digital assets like cryptocurrencies, stablecoins, and tokenised securities gain traction, firms operating in this space face increasing scrutiny from regulators, particularly the Monetary Authority of Singapore (MAS). Ensuring proper governance, compliance, and risk management is vital for maintaining trust and unlocking business opportunities in the regulated financial ecosystem. 

Key Digital Assets Risks 

Digital assets pose a unique set of risks distinct from traditional financial instruments. These include:

  • Cybersecurity and Technology Risks: Vulnerabilities in blockchain platforms, smart contracts, and digital wallets can lead to theft or loss of assets.
  • Fraud and Financial Crime: Digital assets are attractive targets for money laundering, fraud, and terrorist financing due to their pseudonymous nature.
  • Volatility and Market Risks: Extreme price fluctuations can lead to significant financial losses for investors and platforms.
  • Operational Risks: Failures in internal processes, custody arrangements, or third-party service providers can disrupt operations or lead to loss of control over digital assets.
  • Legal and Regulatory Uncertainty: Jurisdictional ambiguities and evolving regulations can pose compliance challenges and legal risks.
  • Authenticity of the ICO: Fraudulent or unverified token offerings can lead to investor losses and regulatory violations.

 

Compliance Requirements

Under Singapore's regulatory framework, firms dealing with digital assets must adhere to these compliance obligations:

  •  Licensing under the Payment Services Act (PSA): Digital payment token (DPT) service providers must obtain a license from MAS to operate legally.
  • Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT): Firms must implement customer due diligence (CDD), transaction monitoring, and suspicious transaction reporting.
  • Ongoing Disclosure and Record-Keeping: Companies are required to maintain transaction records and make timely disclosures to MAS.
  • Technology Risk Management (TRM) Guidelines: MAS mandates strict controls on IT systems, data protection, and cyber resilience.

 

Controls Required to Meet MAS Expectations

To comply with MAS requirements, firms must implement a robust framework including:

  • Governance and Risk Management: Clear roles and responsibilities, risk assessment processes, and board oversight for digital asset activities.
  • Cybersecurity Measures: Encryption, multi-factor authentication, secure key management, and incident response planning.
  • AML/CFT Controls: Automated tools for KYC, blockchain analytics for transaction tracing, and staff training programmes.
  • Business Continuity and IT Resilience: Backup systems, disaster recovery plans, and regular testing of critical infrastructure.
  • Audit and Monitoring: Independent reviews, internal audits, and real-time compliance monitoring to ensure adherence to MAS PSA rules.

Why Compliance Matters

In a market where credibility is everything, a strong compliance foundation sets your business apart. Firms with robust governance scale faster. Compliance opens doors to partnerships and investors and builds long-term resilience and credibility

How RSM can help

With governance at the core of our approach, RSM helps businesses navigate complex regulations, manage risk, and build trust in an increasingly dynamic digital landscape. Leveraging our deep expertise and trusted network, we deliver tailored guidance with robust security solutions to help you push forward in the digital finance space with confidence, clarity, and control. These include:

  • Advisory on licensing requirements under the Payment Services Act (PSA) for Digital Payment Token (DPT) service providers.
  • Gap analysis to identify regulatory deficiencies before applying for licensing.
  • Advisory including development of AML/CFT policies and procedures.
  • Advisory on Customer Due Diligence (CDD) and Know Your Customer (KYC) frameworks.
  • AML/CFT risk assessments tailored to digital asset exposure.
  • Training programmes for staff on AML/CFT compliance.
  • Advisory on suspicious transaction reporting (STR) and regulatory filings.
  • Review of Cyber Hygiene, Technology Risk Management (TRM), Outsourcing, Business Continuity controls in accordance with MAS guidelines.
  • Cybersecurity assessments including wallet security, smart contract audits, and secure key management.
  • Advisory on incident response planning and cyber resilience strategies.
  • Advisory and establishment of governance frameworks for digital asset operations.
  • Enterprise risk assessments covering market, operational, legal, and compliance risks.
  • Development of internal policies, procedures, and risk management frameworks aligned with MAS PSA expectations.
  • Board training on digital asset risk oversight and governance duties.
  • Design and testing of Business Continuity Plans and Disaster Recovery Plans.
  • Review of IT resilience practices to ensure operational continuity in case of disruptions.

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