You are now a crypto millionaire. What's next?

Singapore is regarded as a tier-1 jurisdiction for a reason. The Monetary Authority of Singapore along with the city-state’s various working groups produce some of the finest documents on a whole range of AML/CFT topics.

The following is not an exception.

Last week, Singapore’s AML/CFT Industry Partnership (ACIP) published “Industry Perspectives on Best Practices for Source of Wealth (SoW) Due Diligence”.

I immediately thought of private banking that serves UHNW individuals, and rightly so. The document reinforces Singapore’s guiding “same risk, same control” principle, and advises traditional financial institutions (the document’s target audience) to apply a tiered risk-based approach.

Different types of SoW sources (e.g., inheritance, gifts, business ownership, investments, employment) are examined, each with specific challenges and recommended best practices.

In summary, it is a comprehensive manual on how your bank shall think about your next million dollar deposit.

But that’s not what caught my attention.

Have you ever wondered how do the banks assess investment gains from cryptocurrencies? I did.

More specifically, how do banks assess SoW when your wealth stems from Bitcoin gains or NFT flips?

Surprisingly (or not), Singapore has an answer. The paper advises financial institutions to do the following when facing crypto-related wealth:

• Obtain trading records and account statements;

• Reconcile any price movements (high-frequency trading use case);

• Combine on/off-ramp tracing and blockchain analytics, when the documents are missing.

The MAS even recommends referring to best practices for sale of goods “that cannot be easily valued”, covering assets such as art, antiques, NFTs, and domain names.

What do you feel from reading the guidance?

• To me, it shows that Singapore views crypto in scope, and the scrutiny is real. Not a checkbox exercise;

• The message to banks is also clear: understand it, verify it or do not take it;

• For clients and advisors alike, this guidance serves as a reminder that regulatory clarity is sharpening, and Singapore isn’t afraid to lead.

In a world still figuring out how to handle digital wealth, this is what tier-1 looks like.

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