(July 19) – Singapore intends to expand the scope of cryptocurrency regulations and rejected claims that some recently collapsed digital asset outfits were regulated in the city-state.
The Monetary Authority of Singapore (MAS) plans to consult on the proposed steps in the coming months, its managing director Ravi Menon said in a speech after releasing the central bank’s annual report on Tuesday (July 19).
In response to questions, he said that the revised rules may include further fine-tuning retail investors’ access to cryptocurrencies and expanding the scope of regulations to cover more activities.
Menon said that some uptight crypto players reported as being based in the city-state had “little to do with crypto-related regulation in Singapore.” He cited TerraForm Labs and Luna Foundation Guard, which were behind the collapsed TerraUSD stablecoin, hedge fund Three Arrows Capital, and lender Vauld.
Some crypto firms with ties to Singapore imploded or came under heavy pressure this year when a global wave of monetary tightening triggered a crash that wiped more than $1 trillion (about RM4.46 trillion) off the value of digital tokens.
Three Arrows Capital, previously a poster child for unbridled optimism about virtual assets, filed for bankruptcy this month. Previously, he was reprimanded by the MAS for providing false information and exceeding the limit of his assets under management.
The fund was not regulated by the Payment Services Act and had stopped managing funds in Singapore before the problems that led to its bankruptcy, Menon said.
TerraForm Labs and Luna Foundation Guard are not licensed or regulated by MAS, nor have they applied for any license or sought exemption from holding any license, it added. Crypto lender Vauld does not have a license from MAS, according to Menon.
Vauld has suspended token withdrawals, one of several crypto outfits globally that ran into trouble as leveraged betting imploded.
Singapore authorities have long maintained a cautious embrace of the crypto industry, granting just 14 firms the regulatory go-ahead to provide digital token payment services locally, a fraction of nearly 200 applicants.
The city state is tightening rules on cryptocurrency investments, including clamping down on marketing and requiring virtual asset providers to obtain a local license, even if they only do business abroad.
Next month, the central bank will hold a seminar to shed more light on its position on crypto regulation, Menon said.
“We will establish how our regulatory and development approaches will work in harmony to achieve Singapore’s vision as an innovative and responsible digital asset hub,” he said.