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Singapore may subject luxury assets, including cars, watches and handbags, to anti-money laundering controls in one of a series of restrictions under consideration as the Asian financial hub reels from a S$2.8bn (US$2bn) money-laundering scandal.

In response to questions in parliament on Tuesday about the probe, Singapore’s government said it would examine extending anti-money laundering requirements, such as tough know-your-customer due diligence checks, to high-value assets including vehicles, handbags and alcohol. Such items are not currently regulated, unlike precious stones or metals.

But the government cautioned against “knee-jerk” reactions to what is now one of the world’s biggest money laundering investigations, saying they could make the city-state a harder place to do business.

The government’s proposal to broaden anti-money laundering regulations comes as the total value of assets seized or frozen as part of the probe has nearly tripled to S$2.8bn.

The scandal burst into the open in August when 10 people were arrested in an operation spanning the city-state, with authorities seizing luxury cars, designer watches, handbags and expensive wine as well as cash and gold bars.

Foreign and local banks, as well as property agents, precious metals dealers and elite golf clubs have been caught up in the case.

Singapore has faced public pressure to crack down on illicit activity as well as questions about how the syndicate — which is believed to have laundered the proceeds of overseas criminal activities as well as forgery — was able to operate for so long despite the city-state’s strict financial regulations.

The suspects, all of whom had Chinese passports and have been tied to illegal gambling operations originating in the mainland, are alleged to have been operating in Singapore since 2017, and the case first attracted government scrutiny in 2021. Several individuals are still at large and wanted for questioning, according to the Singapore Police Force.

An interministerial committee, led by second minister for finance Indranee Rajah, will be formed to consider further measures to strengthen Singapore’s anti-money laundering regime, the government said on Tuesday.

In addition to the possibility of extending due diligence controls to purchases of luxury goods, the government said it would examine tightening the immigration verification process. Singapore has absorbed rapid inflows of wealth and individuals, particularly from China, since the onset of the coronavirus pandemic.

Any new measures would require careful moderation, said Josephine Teo, second minister for home affairs. Singapore has said its antitrust and money laundering requirements comply with international standards.

“We need rules . . . but let us be careful about knee-jerk reactions, which could make our business environment unfriendly,” Teo said.

The case has already had repercussions for the hub’s financial community. Wealth managers and other advisers have said that waiting periods to open private banking accounts for clients with foreign passports, including from China, have stretched into four months, up from less than one month previously, while some existing accounts were closed, as authorities tightened due diligence.