- Singapore intensifies the scrutiny on crypto firms operating in the country, as the government gears up to implement some regulatory changes.
- Crypto firms Three Arrows capital, TerraForm Labs and Vauld also enthused Singapore to up its regulatory safeguards for the nascent sector.
The Monetary Authority of Singapore (MAS) has issued an inquiry form to some crypto firms requiring them to “promptly” submit data about their businesses. According to a Friday report by Bloomberg, the move was compelled by the need to intensify the scrutiny on crypto firms operating in the country, as the government gears up to implement some regulatory changes touching on retail customers and stablecoins.
“The Monetary Authority of Singapore has sent a questionnaire to some applicants and holders of its digital-payments licence seeking highly granular information about their business activity and holdings,” the report read.
In its communications, the MAS reportedly asked to be supplied with information regarding the top tokens owned, top tokens staked through DeFi protocols, lending and borrowing counterparties as well as the amount loaned. Further, the MAS clarified that digital payment token service providers are not subject to risk-based capital or liquidity requirements and that crypto firms are not also required to safeguard customer assets from insolvency risks.
The MAS, which is also the country’s Central Bank has been tightening the noose around crypto service operators in the region, particularly after the May Terra-Induced stablecoin de-peg roiled the crypto market leading to the disappearance of rough $40 billion in investor funds.
The liquidity crisis rocking the Decentralized Finance(DeFi) sector leading to the collapse of crypto firms Three Arrows capital, TerraForm Labs and Vauld also enthused Singapore to up its regulatory safeguards for the nascent sector. Singaporean crypto lender Hodlnaut has been the most recent crypto firm to fall into the crypto liquidity crater attracting a probe by authorities.
Last week, Ravi Menon, Director MAS said that beyond containing terrorist financing risks and money laundering the regulator was focused on protecting consumers, ensuring healthy market conduct and guaranteeing a stable reserve backing for stablecoins. In June the MAS also vowed to brutally and unrelentingly deal with crypto firms who engaged in ”bad behaviour” during their dealings.
That said, despite MAS’ setting a high regulatory bar, 10 crypto firms have been issued with operating licences in Singapore including Crypto.com, DBS-owned brokerage firm Vickers Securities, FOMO Pay and UK-based Revolut bank. Data from MAS’ Financial Institutions Directory however shows that over 170 applications for an operator license are still pending.
However, some top exchanges, including Huobi, Binance and Bybit have been forced to relocate their businesses elsewhere in the past citing an unfriendly regulatory environment by Singaporean authorities.
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