Crypto Firms in Singapore Anticipate New Regulations
- New crypto regulation in Singapore could mandate firms to share key details to improve transparency.
Singapore is beefing up its scrutiny of crypto businesses operating within its region in anticipation of upcoming legislative reforms. As reported by Bloomberg, an anonymous source revealed that the Monetary Authority of Singapore sent a questionnaire to select candidates and holders of its digital-payments license seeking extremely detailed information about their company’s activities and holdings.
The questionnaires, which were distributed over the past month, are aimed at evaluating the firms’ financial stability and interconnection. The MAS further demanded an urgent response from these firms. According to the sources, the agency requested information on the major tokens owned, the top lending and borrowing counterparties, the amount lent, and the top tokens staked using deFi protocols.
The MAS is also interrogating regional cryptocurrency exchanges about the procedures they follow before going live after receiving a highly sought-after digital payment token service. This news comes as authorities in Singapore are set to review crypto regulation policies. The MAS said it is tasked with balancing the growth of crypto activities and the loopholes in the system.
Regulators are particularly concerned about the losses investors face in the aftermath of a project crash. For example, investors around the world lost as much as $40 billion in the Terra crash of May. So, the MAS has made it a key priority to keep its region safe.
According to the MAS Managing Director, Ravi Menon, new crypto policies will cover a broader part of the industry and will now include many activities. The details of the MAS’s dealing with the exchanges are not disclosed; however, more information will emerge in the coming days.
Out of roughly 200 applicants, the regulator has so far approved more than ten licenses for cryptocurrency companies seeking to offer services using digital payment tokens in Singapore. The Asian country was one of the early adopters of cryptocurrency and had a friendly approach to regulating crypto firms. However, recent failures of crypto projects have led to calls for regulatory reforms. According to Hagen Rooke, a partner at a law firm in Singapore,
In light of the various insolvencies and counterparty defaults which have plagued the crypto industry recently, the MAS is likely to be assessing the need for additional regulatory measures to mitigate the risks that led to these distressed scenarios.
Part of the new crypto regulation to be introduced by the MAS might require small-scale investors to pass a suitability test before being permitted to trade cryptocurrencies. These firms will also be mandated to disclose key information to improve transparency.
There are concerns that the new MAS policies might make it burdensome for crypto firms to thrive in the country.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
