Singapore Plans to Broaden Crypto Regulations

Singapore Plans to Broaden Crypto Regulations

 

Singapore will broaden its digital currency regulations to cover more activities, joining a global push to clamp down on risks associated with such activities after a series of business failures rocked the Cryptocurrency Industry.

 

The Monetary Authority of Singapore (MAS) intends to consult on proposed steps in September or October this year, Managing Director Ravi Menon said in response to questions after releasing the Central Bank’s latest Annual report on July 26^th. The revised guidelines may include further tightening retail investor is access to cryptocurrencies, he added without providing further details. 

 

 

Menon added that in future, following the footsteps of international regulators, the Central bank is also going to be broadening the scope of regulations to cover more activities. Hence, companies who are involved in such activities but are currently not caught may well be caught.

 

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This year is Crypto Market slump has also exposed the cracks in global cryptocurrency regulation, with billions of dollars held up with bankrupt Digital Currency and asset lenders and creditors trying to claw back money from collapsed hedge fund Three Arrows Capital. The turmoil gathered pace in early May this year when the TerraUSD Stablecoin collapsed from its intended USD peg. 

 

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Many of such companies that imploded operated outside the scope of existing regulations, and their failures highlighted the risky business processes and decisions as well as the web of huge debts that connected many of the crypto industry’s top players. Regulators from the US to Singapore are now racing to fix those crack while acknowledging that such regulatory change will require more global coordination.  

 

Singapore is Crypto system

 

TerraForm Labs and Luna Foundation Guard, the firms behind TerraUSD, list Singapore office as their base. Three Arrows was a registered fund management firm in the city-state until earlier this year. Vault a Cryptocurrency lender trying to stave off collapse by selling itself, is also headquartered in Singapore.

 

Also Read: IMF Global Outlook Predicts Dark Clouds Ahead For Crypto Markets

 

Menon pushed back against the notion that those firms fall under Singapore is regulatory guidelines purview. None of them held permits or licenses under its licensing system for Digital-Asset Service providers, he said. Singapore has a strict process in place for vetting applications for such licenses, approving just 14 out of almost 200 firms that sought licenses so far. 

 

Some strained Cryptocurrency platforms also reported as based there have “little to do with Cryptocurrency-related regulation in Singapore,” Menon said in a speech to reporters. 

 

Three Arrows, formerly a poster child for unbridled optimism about digital currencies and assets, was reprimanded by the Central Bank for providing false data and information and exceeding the limit on its assets under management. The Cryptocurrency hedge fund had informed the regulatory body its intent to cease fund management activity from May 6, just before the collapse of TerraUSD.

 

The central bank reprimand was announced just after Three Arrows was ordered into liquidation by a British Virgin Islands court.   

 

Wary Embrace 

 

Vauld has halted token withdrawals, one of a number of Cryptocurrency outfits globally that hit panic button as leveraged bets imploded. Its parent company has applied with Singapore courts for a moratorium to avoid a forced wind-down as it negotiates a sale to rival Nexo. 

 

Singapore government authorities have long kept a wary embrace of the Cryptocurrency Industry, with Menon complimenting the underlying Blockchain Technology is scope for innovation while stressing that retail investors should steer clear of Digital Currencies and Assets.  

 

The city-state has been tightening rules around cryptocurrency investments, including clamping down on marketing and requiring digital asset providers to be licensed locally even if they only do overseas business. 

 

Menon further added that MAS will also hold a seminar in August to shed more light on its position on Cryptocurrency regulation.

 

“We will set out how our developmental and regulatory approaches will work in harmony to achieve the vision of Singapore as an innovative and responsible Digital Asset hub,” he said.