MAS takes robust regulatory actions against nine financial institutions and revokes a capital markets services licence

Summary

It has been a very busy July 2025 for the Monetary Authority of Singapore’s (“MAS”) Enforcement and Anti-Money Laundering Departments. In this regard, MAS announced significant regulatory actions addressing anti-money laundering and countering the financing of terrorism (“AML/CFT”) deficiencies. These actions include imposing S$27.45 million in fines on nine financial institutions for AML/CFT breaches linked to a S$3 billion money laundering case uncovered in August 2023, and the revocation of a capital markets services (“CMS”) licence for multiple regulatory violations. This client alert consolidates and analyses the key points from these enforcement actions, highlighting their implications for financial institutions operating in Singapore.

Key developments

1. Fines on nine financial institutions for AML/CFT breaches

MAS imposed composition penalties totalling S$27.45 million (approximately US$21 million) on nine financial institutions for breaches of AML/CFT requirements, following supervisory examinations conducted between early 2023 and early 2025.

Nature of breaches

The breaches, identified during inspections linked to the high-profile money laundering case, included:

• Inadequate customer risk assessments: All nine financial institutions failed to conduct proper risk assessments for customers, particularly those posing higher money laundering risks.
• Insufficient source of wealth verification: The financial institutions did not adequately establish or corroborate the source of wealth for high-risk customers, overlooking significant discrepancies or red flags.
• Weak transaction monitoring: Eight of the nine financial institutions failed to adequately investigate suspicious transactions flagged by their own systems, increasing exposure to financial crime risks.
• Delayed or inadequate reporting: Some financial institutions did not file suspicious transaction reports promptly or at all, hindering timely regulatory intervention.

Additional enforcement actions

• Prohibition orders: MAS issued prohibition orders against four individuals from one financial institution, barring them from regulated financial activities for periods ranging from three to six years. These individuals include the CEO, COO, and two relationship managers.
• Private reprimands: Nine relationship managers and supervisors received private reprimands for less severe lapses.
• Remediation efforts: All affected financial institutions have initiated remediation plans, which MAS will closely monitor to ensure compliance with updated supervisory expectations.

Context

The penalties stem from the S$3 billion money laundering case involving illicit assets from overseas scams and online gambling, converted into luxury goods, real estate, and other assets in Singapore. We find that the fines reflect the severity of the breaches, the financial institutions’ exposure to persons of interest, and the weaknesses in their AML/CFT controls. Notably, one financial institution’s penalty includes breaches related to offshore accounts, which were also subject to a non-prosecution agreement with the US Department of Justice in May 2025. 

2. Revocation of a CMS licence

On 3 July 2025, MAS revoked the CMS licence of a financial institution and reprimanded its executive director and former CEO for multiple breaches of regulatory requirements. The violations included:

• Failure to file financial reports: The company did not submit audited financial statements for 2022 and 2023, quarterly returns for 2024 and Q1 2025, or monthly Singapore credit submissions from 2024 to March 2025.
• Non-compliance with notification requirements: The company failed to notify MAS of changes to its principal place of business, the resignation of an executive director, and having fewer than two full-time appointed representatives.
• Inadequate compliance function: The company did not establish a compliance framework commensurate with the nature, scale, and complexity of its business.
• Non-payment of fees: The company failed to pay its annual corporate fees for financial year 2024.

The sole remaining director was aware of these breaches but failed to take adequate measures to ensure compliance, leading to her reprimand.

Our key analysis

1. Strengthening AML/CFT Compliance

We believe the fines imposed on the nine financial institutions underscore MAS’s zero-tolerance approach to AML/CFT lapses, especially given Singapore’s reputation as a global financial hub. The breaches reveal a critical gap between policy establishment and implementation, as the financial institutions have the AML/CFT frameworks in place but failed to execute them effectively. We recommend that financial institutions prioritise:

• Robust implementation: Regular training, internal audits, and stress-testing of AML/CFT controls to ensure consistent application.
• Enhanced due diligence: Improving processes for customer risk assessments and source of wealth verification, especially for high-risk clients.
• Proactive monitoring: Strengthening transaction monitoring systems and ensuring timely follow-up on suspicious activities.

We anticipate that MAS’ commitment to monitoring remediation efforts and issuing updated supervisory expectations will drive ongoing compliance improvements. Financial institutions should align their practices with these expectations to avoid future penalties.

2. Implications of licence revocation

The revocation of the CMS licence serves as a stark reminder of the consequences of non-compliance with fundamental regulatory obligations. We observe that the breadth of violations - ranging from failure to file financial reports to inadequate compliance functions - points to systemic governance issues. Our key takeaways include:

Governance and oversight: Senior management, including directors, must take active responsibility for ensuring compliance with all regulatory requirements.

• Operational compliance: Financial institutions must maintain robust compliance functions proportionate to their business operations, including timely submission of financial and regulatory reports.
• Reputational risk: Licence revocation can severely damage a firm’s reputation and operational viability, emphasising the need for proactive compliance measures.

3. Broader regulatory trends

We see these enforcement actions as aligning with MAS’ broader regulatory priorities, including:

• Heightened AML/CFT enforcement: We observe that MAS is intensifying its scrutiny of AML/CFT frameworks, driven by high-profile cases like the S$3 billion money laundering scandal. MAS is enhancing its supervisory tools, including data analytics and cross-border collaboration, to detect and deter financial crimes. We expect MAS to issue further guidance on risk-based approaches to customer due diligence and transaction monitoring, emphasising real-time compliance.
• Technology-driven regulation: As financial institutions increasingly adopt digital platforms, we note that MAS is prioritising the regulation of technology-related risks. Initiatives like the Technology Risk Management Guidelines and the expansion of Project Guardian signal a focus on integrating cybersecurity and AML/CFT controls into digital transformation strategies. We anticipate stricter requirements for managing risks in digital asset markets, particularly in decentralised finance (DeFi) and cryptocurrency transactions.
• Sustainability and governance: We see MAS embedding environmental, social, and governance (ESG) considerations into its regulatory framework. The enforcement actions underscore the importance of strong corporate governance, as lapses in oversight contributed to both the AML/CFT breaches and the licence revocation. We expect MAS to push for greater board and senior management accountability and alignment with its Guidelines on individual accountability and conduct, particularly for smaller institutions.
• Global alignment and regional leadership: We recognise that MAS is aligning its regulatory approach closely with international standards, such as those set by the Financial Action Task Force (FATF). The cross-border nature of the money laundering case highlights Singapore’s role in global AML/CFT efforts. We anticipate increased cooperation with jurisdictions like the US and EU, to strengthen Singapore’s leadership in financial regulation.

These trends suggest that MAS is adopting a proactive, risk-based, and technology-enabled approach to regulation, balancing innovation with robust oversight to maintain market integrity.

Our recommendations for financial institutions

1. Conduct internal reviews: We advise performing comprehensive audits of AML/CFT controls, focusing on customer due diligence, source of wealth verification, and transaction monitoring.
2. Strengthen governance: We encourage ensuring senior management actively oversees compliance functions and addresses regulatory obligations promptly.
3. Invest in technology: We recommend leveraging advanced analytics and monitoring tools to enhance detection of suspicious activities and improve reporting efficiency.
4. Train staff: We advocate implementing regular training programs to ensure employees understand and effectively implement AML/CFT policies.

Assistance we can provide

We view MAS’ recent enforcement actions against nine financial institutions and the revocation of a CMS licence as a clear signal of the critical importance of robust AML/CFT compliance and adherence to regulatory requirements. 

The substantial fines and licence revocation highlight the severe consequences of lapses in governance and implementation. In this regard, we have been assisting clients with navigating MAS’ AML/CFT requirements. We assist clients to review and strengthen AML/CFT compliance frameworks to align with the relevant MAS requirements and provide tailored advice on governance and risk management. Our team can also guide clients in implementing robust screening processes and beneficial ownership inquiries, while keeping them informed of MAS’ regulatory developments. This ensures financial institutions keep pace with evolving compliance and regulatory expectations. 

Do reach out to us should you require assistance. 

This article is produced by our Singapore office, Bird & Bird ATMD LLP. It does not constitute legal advice and is intended to provide general information only. Information in this article is accurate as of 7 July 2025.