Singapore’s central bank tightens crypto regulations, here’s why
Singapore has decided to strengthen and expand its crypto regulatory framework amid the crypto downturn.
The Monetary Authority of Singapore (MAS) is set to tighten the framework on crypto platforms in the coming months.
This move by MAS comes after witnessing the collapse of the industry. Ravi Menon, CEO of MAS, is of the opinion that investing in cryptocurrencies remains extremely risky.
The tightening of the scope of digital asset regulations is now going to look into more activities and also stiffen retail investors’ access to the virtual currency as per the latest rules.
These rules will be proposed soon in the coming months. In addition, MAS is considering consulting on its proposed measures around the months of September and October 2022.
According to the launch of MAS’s annual report, the main focus area for regulation in and even outside of Singapore has been money laundering and terrorist financing.
MAS wants to align with international regulators for crypto regulation
Menon also added that most jurisdictions do not cover areas such as consumer protection, market conduct and reserve support for stablecoins, reviews and public consultations are under development among international regulators and need to be strengthened in these areas.
He further added that
Going forward, in line with international regulators, we will also expand the scope of the regulations to cover more activities. So players who do any of these activities but are currently not caught may well be caught. It is hard to say.
MAS has also mentioned that Singapore will now need many such units to get proper licensing.
Menon also expressed concern about crypto firms going through difficult times and based out of Singapore that have “little to do with crypto-related regulation in Singapore”.
Menon also referred to as TerraForm Labs and Luna Foundation Guard which were related to the major collapse of TerraUSD stablecoin, lacked appropriate licensing for MAS and they had not applied for any license. They also had no exemption from holding licenses as they had not applied for the same.
Related Reading | Crypto.com wins license approval to offer payment services from Singapore regulator
Singapore’s anti-crypto stance strengthened due to the recent UST collapse
Singapore’s anti-crypto sentiment has gained intensity due to the collapse of Terraform Labs’ “UST” stablecoin collapse along with the continued crypto carnage. Terraform Labs happens to be incorporated in Singapore among other organizations.
Three Arrows Capital was also a registered fund management firm in Singapore that has recently gone bankrupt.
Vauld is also among such names that are headquartered in Singapore, but are not currently licensed by MAS and have not applied for any form of exemption from holding a license under the Payment Services Act.
Currently, it has submitted its license application pending review.
In addition, MAS clarified that Three Arrows Capital was not regulated under the Payment Services Act.
It operated under the registered fund management regime to conduct limited fund management activities, but it ceased managing funds in Singapore before the company was brought into insolvency.
Related Reading | The Monetary Authority of Singapore (MAS) is tightening the process for approving crypto licenses
Featured image from Vulcan Post, chart from TradingView.com
