Crypto regulations could become tighter as the Singaporean government introduces more restrictions on the digital asset class. This development comes after the collapse of many top cryptocurrency firms.
For example, Babel, Vauld, 3AC, and Celsius have been declared bankrupt after the market dip hit them hard. The bearish effect was further made worse by the collapse of the Terra ecosystem involving Luna and UST. Investors lost billions, and lawsuits began to fly around.
As a result, the government of the city-state of Singapore is ready to introduce stricter regulations in the crypto sphere. These changes aim to match the rest of the world in crypto regulations. Interestingly, some of the collapsed crypto entities have bases in Singapore.
Singaporean-Based Companies Immune to Regulations
The home country has not licenced some Singaporean-based crypto companies that went down during the recent collapse. Consequently, these companies are not subjected to local regulations.
Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), stated during a recent release of the central bank’s annual report that entities like Terraform Labs (TFL) and the Luna Foundation Guard (LFG) are unregulated in Singapore despite being based there. However, these entities have been primarily operational in Singapore since they moved there.
The MAS plans to hold consultations to develop better crypto regulations in the coming months. The new rules will restrict access to retail crypto investments, preventing 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.
The Future of Crypto In Singapore
While many may feel that the Asian country is anti-crypto due to the planned regulations, Singapore has remained one of the leading countries in the world to embrace the new crypto and blockchain technology for some time now.
Furthermore, the current push for better regulations is a necessary step to keep the space safe for investors. This could be why only fourteen 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.”