Singapore has stated its objective to expand the scope of the country’s cryptocurrency regulations. According to Managing Director Ravi Menon, the Monetary Authority of Singapore (MAS) intends to consult on and revise its proposed regulations in September or October. Mr. Menon stated that the revised rules may restrict retail investors’ access to cryptocurrencies even further.
Singapore’s central bank intends to meet with industry players in order to develop tighter regulations for the emerging sector. Director Menon hinted at this on Tuesday, along with the release of the financial regulator’s annual report, saying that the process of consultation will seek to broaden the scope of its rules to cover more activities in the sector in the coming time. Menon stated: In the future, we will broaden the scope of regulations to cover more activities, in accordance with international regulators. As a result, players who are currently engaging in some of these activities but are not being caught may soon be caught.
Bear market exposed numerous flaws in global regulation
The year 2022 witnessed one of the largest market meltdowns in history, exposing flaws in global regulations. Billions of dollars are locked up with bankrupt digital-asset lenders, and creditors are scrambling to recover what little money remains from the collapsed hedge fund Three Arrows Capital (3AC). When the TerraUSD stablecoin projection imploded in May, the market upheaval accelerated. According to a Bangkok Post article, many of the recently imploded companies were operating outside the scope of existing regulations.
Their failures highlight risky business practices as well as the web of debts that binds many industry heavyweights together. As a result, regulators from the United States to Singapore are now attempting to fill the gaps in the industry’s regulation while acknowledging the need for a global effort.
Singapore – The Hub of Many Falls
TerraUSD, TerraForm Labs, and Luna Foundation Guard all have their headquarters in Singapore. In Singapore, the now-defunct 3AC was also registered. Vauld, another crypto lender that is desperately trying to save itself by selling itself, also has its headquarters in Singapore. Menon has disputed the notion that the struggling companies are subject to Singaporean regulation. He claimed that none of them were licensed under the country’s virtual asset service provider licensing system. In a speech, Menon stated: Some strained crypto players reported to be based there have little to do with Singapore’s crypto-related regulation.
Menon stated that 3CA, a former poster child for virtual assets, was reprimanded by MAS before declaring bankruptcy for providing false information and exceeding the limit on its assets under management. Prior to its problems that led to bankruptcy, the hedge fund was not regulated under the Payment Services Act and had ceased managing funds in Singapore. Terraform Labs and Luna Foundation Guard are also not licensed or regulated by MAS and have never applied for or been granted an exemption from holding a license.
Singapore adopts a cautious stance
Singapore’s authorities have long been wary of the crypto industry, granting regulatory approval to only 14 firms – a fraction of the 200 applicants – to provide digital-token payment services. The country has strict rules regarding cryptocurrency investments, including a ban on marketing and the requirement that virtual-asset providers be licensed locally. Menon stated that the central bank will hold a seminar next month to clarify its stance on cryptocurrency regulation.
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