Monetary Authority of Singapore to tighten laws for crypto players

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Amidst heightened volatility in the cryptocurrency market, the Monetary Authority of Singapore (MAS) will tighten laws for crypto players in the country in the coming months, and take firm action if any entity is found to be conducting illegal activities, Managing Director Ravi Menon said.

Menon said most jurisdictions of the central bank do not cover areas like consumer protection, market conduct, and reserve backing for stable coins. Reviews and consultations are being done among international regulators.

Releasing the central bank's annual report, Menon said some crypto players that have come under strain had been reported by the media as being “Singapore-based,” but in reality, these firms have little to do with crypto-related regulations in Singapore.

Singapore to explain its position on cryptos

He reiterated that investing in cryptocurrencies is highly risky and that repeated warnings by MAS against retail investments in cryptocurrencies and ratcheting up policies to restrain retail access have raised some questions about where MAS stands with respect to the digital asset ecosystem.

Menon said that the financial regulator will organise a dedicated seminar to share its strategies to develop Singapore as a digital asset hub next month.

"We will explain our position on cryptocurrencies, stable coins, blockchains, tokenisation, smart contracts and digital assets, etc -- their risks and opportunities; shortcomings and potential, " said Menon.

Troubled entities have nothing to do with Singapore

Citing examples of beleaguered crypto firms, he said TerraForm Labs and Luna Foundation Guard are not licensed or regulated by MAS, nor have they applied for any licence or sought exemption from holding any licence.

Further, he clarified that Three Arrows Capital was not regulated under the Payment Services Act. However, he had operated under the registered fund management regime to carry out limited fund management business, but had ceased to manage funds in Singapore prior to the problems leading to its insolvency.

Similarly, Vauld is currently not licensed by MAS nor has it sought an exemption from holding a licence under the Payment Services Act. It has submitted a licence application, which is pending review, according to Menon.

“MAS and relevant government agencies will take firm enforcement action if any entity is found to be conducting illegal activities or performing regulated activities without a licence,” the Managing Director said.

Focus on fighting money-laundering, terror financing

He further said that while Singapore is often seen as being at the forefront when it comes to licensing and regulatory framework, the focus of crypto regulation to date in Singapore, as well as in most major jurisdictions, has been on containing money-laundering and terrorist financing risks.

“Most regulatory regimes today do not cover areas such as consumer protection, market conduct, and reserve backing for stable coins. This is changing.  Reviews and public consultations are under way among international standard-setting bodies and regulators to strengthen regulation in these areas. MAS is planning proposed measures in the next few months,” he said.