Singapore To Get Stricter On Crypto, Broad Regulations To Come
- Singapore plans to go more strict on cryptocurrency exposure that financial institutions have
- The Monetary Authority of Singapore will consult and discuss proposed steps in annual report in September or October
Singapore, the country that recently lost the crown of being the most crypto-friendly nation in the world, has plans to intensify cryptocurrency regulations to cover more activities.
Following a series of business failures in the industry, the Monetary Authority of Singapore’s (MAS) managing director Ravi Menon said that the country is joining the global push to clamp down on risks associated with digital currencies.
On Tuesday, after releasing the Central Bank’s annual report, Menon revealed that the MAS plans to consult and discuss proposed steps in September or October.
The new additions to the rules may further restrict retail-investor access to digital assets.
“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.”
Menon stated.
With billions of dollars tied up with insolvent digital asset lenders and creditors attempting to recoup funds from the bankrupt hedge firm Three Arrows Capital, this year’s market crash has exposed the gaps in crypto regulation. Regulators from the US to Singapore are currently rushing to fill those gaps despite the fact that broad global cooperation would be required. When the TerraUSD stablecoin (UST) depegged from its original dollar peg in early May, the turmoil escalated.
The situation created sudden panic in the market and rocked all financial regulatory agencies around the world. Soon after the incident, Sarah Pritchard, the executive director of markets at the United Kingdom’s Financial Conduct Authority, said that the regulatory body would keep the stablecoin depegging in mind while drafting crypto regulations.
Moreover, early in June, the Central Bank of Canada also came forward during the time when the entire crypto market was bathing in blood and called for the urgent need for crypto regulation.
Interestingly, the entities behind UST—Terraform Labs and Luna Foundation Guard—declare Singapore as their base. Up until early this year, Three Arrows was a registered fund management firm in the city-state. Crypto lender Vauld, which is trying to avoid bankruptcy by selling itself, has its headquarters in Singapore as well.
Menon disputed the idea that those companies fall under Singapore’s regulatory scope. None of them held permits under its licensing system for VASPs, he added. Only 14 of the 200 companies that have applied for such licenses have been approved by Singapore’s strict application review process. Next month, MAS will host a seminar to clarify its stance on crypto regulation, said Menon.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
