Singapore Is Tightening The Noose Around Crypto Regulation Following Recent Collapse Of Big Crypto Firms

The government of Singapore is introducing more restrictions on crypto-related retail investments.

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Over the last few weeks, the crypto market has seen some of the largest and most popular crypto investment firms go under. The likes of Babel, Vauld, 3AC, and Celsius have been declared bankrupt after the spiraling market hit them hard. The bad effect was further made worse by the collapse of the Terra ecosystem involving Luna and UST. Investors lost billions, and lawsuits started being filed right and left.

For this reason, the government of the city-state of Singapore is now making moves to introduce stricter regulations in the crypto sphere. These changes are aimed at matching the rest of the world in crypto regulations. Interestingly, some of the collapsed crypto entities have bases in Singapore.

Affected Firms Not Licensed In Singapore

While some of the crypto entities affected by the recent crash are based in Singapore, they are not licensed and, therefore, not subjected to local regulations. That’s according to the managing director of the Monetary Authority of Singapore (MAS), Ravi Menon. Talking during a recent release of the central bank’s annual report, Ravi said that entities like Terraform Labs (TFL) and the Luna Foundation Guard (LFG) are not regulated in Singapore despite being based there. However, these entities have been largely operational in Singapore ever since they moved there.

The MAS plans to hold consultations to develop better crypto regulations in the coming months. The regulations will be aimed at restricting access to retail crypto investments; a move is seen as a deterrent to curb too much inflow of funds into unregulated or shady crypto investment funds. For example, just before it imploded, 3AC had been warned against exceeding its asset limit. The firm was also accused of misrepresenting facts to unsuspecting investors.

Is Singapore Warry Of Cryptos?

The reported move by the MAS to plan for heavier crypto regulations may be seen to mean that Singapore is anti-crypto. That may not be the case. For one, Singapore has embraced the new crypto and blockchain technology for some time now, and the current push for better regulations is a necessary step to keep the space safe for investors. This could be the reason why only about 14 out of over 200 crypto-related applicants have been licensed in Singapore.

Ravi Menon said,

“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.”