Singapore MAS Investigates Crypto Companies Before New Legislation

The inquiries, which were issued over the last month, apparently requested "very detailed information" on the operations and holdings of the inspected crypto businesses.

MAS Granted 10 Licenses to Crypto Business

The MAS has so far granted ten licenses to cryptocurrency businesses in Singapore, including exchanges like Crypto.com and the brokerage division of DBS Bank called DBS Vickers.

The most recent regulatory measure in Singapore appears to be intended to increase scrutiny of cryptocurrency companies in light of impending new laws for the sector. The financial watchdog is developing a regulatory framework to cover "consumer protection, market behavior, and reserve backing for stablecoins" in the upcoming few months, according to MAS managing director Ravi Menon's announcement in mid-July.

The MAS particularly referred to gaps in Singapore's current crypto legislation, saying that companies that offer services for digital payment tokens are not liable for risk-based capital or liquidity requirements. Additionally, they are not yet required to safeguard client cash or digital tokens from bankruptcy risks.

3AC - A New Regulatory Framework

Singapore's anticipated new regulatory framework for cryptocurrencies is a reaction to the ongoing liquidity crisis and the related withdrawal problems during a bear market. After failing to make margin calls in mid-June, Three Arrows Capital (3AC), a distressed Singaporean cryptocurrency hedge firm, filed for bankruptcy during this crypto winter.

In the middle of August, Su Zhu, a co-founder of 3AC, stated in an affidavit that the business changed its registration from Singapore to the British Virgin Islands in September 2021. He allegedly charged the liquidators with deceiving authorities over the organizational structure of 3AC.