Singapore Plans to Strengthen Its Regulations on Cryptos

Singapore has voiced its intentions to broaden the scope of cryptocurrency regulations in the country. The Monetary Authority of Singapore (MAS) plans to consult and revise its proposed regulations in September or October, according to Managing Director Ravi Menon. Mr. Menon said the revised rules may include further tightening retail-investor access to cryptocurrencies.

The Singaporean central bank plans to talk with industry players with a view to drawing up tighter regulations for the emerging sector. Director Menon signaled this on Tuesday along with the release of the financial regulator’s annual report, saying the process of consultation in the coming time will seek to broaden the scope of its rules to cover more activities in the sector. Menon said,

Going forward, in line with international regulators, we’re also going to be broadening the scope of regulations to cover more activities. So, players who are doing some of these activities but are currently not caught may well be caught.

Bear Market Exposed Many Cracks in Global Regulation

2022 has shown us one of the biggest market meltdowns and has exposed the cracks in global regulations. Billions are locked up with bankrupt digital-asset lenders and creditors are trying their best to get what is left of the money from collapsed hedge fund Three Arrows Capital (3AC). The market upheaval gained pace in May when the TerraUSD stablecoin projection imploded. According to an article published by the Bangkok Post, many of the companies that have recently imploded were operating outside the scope of existing regulations. Their failures highlight risky business practices and the web of debts that connect many of the industry heavyweights. Therefore, regulators from the U.S. to Singapore are now trying to patch the gaping holes that exist in regulating the industry, while acknowledging that a global effort is necessary.  

Singapore – The Hub of Many That Fell

The entities behind TerraUSD, TerraForm Labs, and Luna Foundation Guard lists their base as being in Singapore. The now-defunct 3AC was also registered in Singapore. Vauld, another crypto lender trying desperately to save from collapse by selling itself, also has headquarters based in Singapore. Menon has pushed back on the notion that the struggling companies fall under the regulatory purview of Singapore. He said that none of them held permits under the country’s licensing system for virtual asset service providers. Menon said in a speech,

Some strained crypto players reported as based there have little to do with crypto-related regulation in Singapore.

Menon said that 3CA, a former poster child for virtual assets, was prior to declaring bankruptcy, reprimanded by MAS for providing false information and exceeding the limit on its assets under management. The hedge fund was not regulated under the Payment Services Act and had halted managing funds in Singapore prior to its problems leading up to bankruptcy. Terraform Labs and Luna Foundation Guard are also not licensed or regulated by MAS and have never applied for any license or sought exemption from holding any license.

Singapore Takes a Wary Stance

The authorities in Singapore have for long maintained a wary stance on the crypto industry, providing just 14 firms the regulatory approval needed to provide digital-token payment services – a fraction of the 200 applicants. The country has tight rules surrounding crypto investments which include clamping down on marketing and requiring virtual-asset providers to be licensed locally. Menon said that the central bank will hold a seminar next month to shed more light on its position on crypto regulation.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.