Singapore looks to tighten retail crypto regulations further
By Carine Lee
04:15, 20 July 2022
Once arguably the most cryptocurrency friendly country in the world, Singapore, is set to expand its cryptocurrency regulations further.
The catalyst has been a number of crypto business failures linked to the city, the most high profile being the collapse of the Terra blockchain, which was registered in Singapore.
“In reality, these so-called “Singapore-based” crypto firms have little to do with crypto-related regulation in Singapore,” the Monetary Authority of Singapore (MAS) said in its annual report.
The report also cited Three Arrows Capital, and Vauld.
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As Singapore tightens its approach to crypto there has been a marked switched among cryptocurrency players towards Dubai with exchanges such as ByBit relocating to the Gulf state.
While high crypto adoption rates have been one factor in Dubai’s rise to crypto prominence, another has been its regulatory approach.
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Singapore focuses on consumer protection
Previously the MAS had warned Singaporean retail investors of the dangers posed by crypto but it now intends to focus on the institutional market.
Ravi Menon, managing director of the MAS, intends to organise a dedicated Green Shoots seminar to share the central bank’s strategies to develop Singapore as a digital asset hub.
In the report, issued yesterday, Menon said the seminar “will explain MAS’ position on cryptocurrencies, stablecoins, blockchains, tokenization, smart contracts, digital assets, their risks and opportunities; shortcomings and potential.”
Crypto meltdown
The crypto meltdown this year has exposed the cracks in global crypto regulation, with creditors trying to get their money back from Three Arrows Capital, a collapsed hedge fund which invested in tokens including ETH, SOL and LUNA.
SOL to US dollar
Singapore’s crypto regulation has been focused on money laundering and terrorist financing risks, but it is about to change.
Now the focus will be on reviews and public consultations with international standard-setting bodies and regulators.
This will focus on strengthening regulation in the areas of consumer protection, market conduct and reserve backing for stablecoins.
Singapore is likely to remain a major global crypto hub with some - if fewer - investors, looking to expand their presence in the city state.
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