Singapore’s MAS examines crypto firms before new regulation
Singapore MAS studies crypto firms in advance of new regulation, as the Monetary Authority of Singapore begins planning for new cryptocurrency rules to address the current liquidity issue and withdrawal issues.
Bloomberg news reported that Singapore’s central bank has posed comprehensive concerns to license petitioners and incumbents for Digital Payment Tokens.
The surveys were presumably delivered throughout the prior years and requested “very sufficient knowledge” on the financial transactions and ownership of the examined crypto businesses. The Singapore MAS evaluates crypto firms prior to the implementation of new legislation in order to be better prepared when the new laws go into effect.
The audits centered on the economic health and interconnection of companies, with questions ranging from the top assets held to the top lending and borrowing counterparties, loan amount, and the top coins staked via modular finance mechanisms.
Based to those with knowledge of the situation, businesses were expected to respond swiftly. The MAS has issued ten licenses to crypto firms in Singapore, including Crypto.com and DBS Vickers, a selling unit of DBS Bank. This is a tiny subset of the over 200 companies that have filed for the license.
In view of future sector limits, the new regulatory measure in Singapore looks to be aimed to heighten scrutiny on crypto firms. In mid-July, MAS managing director Ravi Menon stated that the banking regulator was building a regulatory structure to address “consumer protection, market behavior, and reserve backing for stablecoins” in the following months.
The MAS highlighted shortcomings in Singapore’s present crypto regulations, stating that digital payment token service providers are not subject to capital or liquidity constraints based on risk. Additionally, they are not required to safeguard consumer cash or digital tokens against foreclosure problems. Instead, regulations are primarily concerned with money laundering, terrorism sponsorship, and technological risks.
The planned introduction of a new crypto regulatory framework in Singapore is a response to the current liquidity problem and the related withdrawal worries amid a bear market. In mid-June, Three Arrows Capital (3AC), a problematic crypto hedge fund based in Singapore, filed for bankruptcy protection after failing to satisfy margin calls.
Su Zhu, co-founder of 3AC, stated in a mid-August affidavit that the company will change its registrations from Singapore to the British Virgin Islands in September 2021. In addition, he allegedly accused the liquidators of manipulating investigators on 3AC’s organizational system.