Singapore distances itself from troubled crypto firms as it plans tighter regulations
- Central bank chief says while Singapore has been at the forefront of licensing and regulatory frameworks, it had focused on money laundering and terrorist-financing risks
- Better consumer protection will soon follow, with the new rules also aimed at attracting ‘strong crypto players to be based here’
Singapore has sought to distance itself from key cryptocurrency players based in the country currently mired in trouble, with the central bank chief saying these “so-called Singapore-based” firms had “little to do” with the city state’s crypto regulations.
Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said authorities, however, were now planning consultations on strengthening crypto rules following this year’s meltdown.
Speaking during the release of the MAS’ annual review report, Menon said the key lesson from recent events was that “investing in cryptocurrencies is highly risky”. This had been the central bank’s warning to the public over the past five years, he added.
“It is not a good investment vehicle for retail investors because the price volatility is huge, and you can lose large amounts of money,” he said.
Menon pointed to Three Arrows Capital – one of the world’s largest crypto hedge funds which recently went bankrupt as bitcoin prices tanked – and said the company was not regulated under the Payment Services Act, which governs providers of digital payment token dealing or exchange services. The hedge fund, while registered as a fund management business, “had ceased to manage funds in Singapore prior to the problems leading to its insolvency”, he said.
