August 31, 2022

Singapore Central Bank’s Crypto Questioning Intensifies as MAS Asks Firms to Submit Data

Singapore Central Bank’s Crypto Questioning Intensifies as MAS Asks Firms to Submit Data
  • The Monetary Authority of Singapore upped the ante against crypto businesses with a pretty in-depth questionnaire about their business practices and operations.
  • At the time of writing, only ten crypto companies hold digital payment licenses in Singapore.
  • Although Singapore’s crypto regulations have a strong AML & CFT focus, the central bank believes more amendments are required to address the elephant in the room.

The central bank of Singapore is asking certain digital asset firms to submit data about their business activity, reported Bloomberg, citing people with knowledge of the matter. 

The questioning isn’t the first step that the MAS has taken towards reigning in the crypto industry & put an end to the wild west days of the industry in the country this year. 

According to the report, MAS asked some cryptocurrency companies for their business-related data, including the amount loaned, top lending and borrowing counterparties, top tokens owned, and top tokens staked via decentralized finance (DeFi) protocols last month.

It all began with the collapse of Singapore-based crypto hedge fund Three Arrows Capital (3AC) and Singapore-registered Vauld and Terraforms Labs. These instances compelled the Monetary Authority of Singapore to initiate several safeguards to protect retail customers.

How can This Move Affect the Broader Crypto Ecosystem?

These steps are significant, considering Singapore's position in the crypto world. 

The number speaks the story in itself. 

Crunchbase, for instance, shows the presence of 500 blockchain companies in Singapore, which is roughly similar to Golden’s numbers. Now, let’s move our focus to the investment that Singapore-based blockchain companies attracted. 

According to KPMG, investment in Singapore’s digital asset companies surged to $1.48 billion in 2021, which is ten times the previous year and almost half the Asia pacific total for the year. These figures show Singapore's position in the Asia Pacific and global crypto assets market.

These figures show why more regulators may follow the Singaporean financial authority’s footsteps sooner or later, as the country is a trendsetter as far as the financial industry is concerned.

Thus, VASPs may soon have to answer a pretty detailed questionnaire about their business operations and financial resilience before granting any licenses in more countries sooner or later. Thus, VASPs must stay prepared.

The Questionnaire

Recently, MAS sent a detailed questionnaire to some applicants and holders of its Digital Payment Token Licenses. The questionnaire asks for “highly granular information” about their business activity and holdings. 

The questions focus on gauging the firms' financial soundness and their interconnectedness. MAS has further asked the firms to respond to the questionnaire promptly.

Working on New Regulations

Much like the rest of the world, Singapore is intensifying its scrutiny of crypto-related firms in the city-state ahead of planned regulatory changes.

As previously mentioned by the managing director of MAS, the financial watchdog has been working on a regulatory framework, which is expected to help address consumer protection, market conduct, and reserve backing for stablecoins. 

Speaking of the country’s current crypto regulations, they are among the strongest when it comes to AML & CFT, but the central bank feels that certain areas within the existing crypto regulations in Singapore require specific amendments. 

Is Singapore Indeed as Crypto-friendly as it is Made out to be?

 Well, the answer to this question can be summed up by the recent statement of Mr. Ravi Menon, Managing Director, Monetary Authority of Singapore: 

"Yes to Digital Asset Innovation, No to Cryptocurrency Speculation"

This also reflects on digital payment licensing, as only a handful of approvals have been granted so far. On top of that, several crypto businesses have already either shut down or moved out after the country’s licensing regime got implemented, such as Binance. 


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