Open Now
Open Now
Watch now

The failure of 3AC has thrown a monkey wrench into Singapore's crypto efforts

Singapore's crypto players expect the authorities to become more stringent against crypto startups as more companies like 3 Arrows Capital fail.

Singapore, Asia-crypto Pacific's powerhouse, is expecting more rescues like Three Arrows Capital (3AC) and is ready for potential threats.

Market participants anticipate that Singapore would become less hospitable to crypto firms in the near future.

Hoi Tak Leung, Ashurst's senior technology counsel, told Reuters:

“After recent events it appears likely that the MAS [Monetary Authority of Singapore] will get tougher on crypto and digital assets,”

So far, MAS has prioritized luring Crypto firms from throughout the region, particularly from China and India.

Singapore's prior stance on cryptocurrency

Singapore has been openly pro-crypto for many years. The government set the objective of becoming the region's crypto center and achieved it. According to a report from the end of 2021:

“Singapore has taken the top spot thanks to a booming crypto economy, positive legislation, and the world’s second highest percentage of crypto-owning population. That’s not to mention the clear government strategy and firm regulations that have been providing reassurance to crypto-shy investors.”

Singaporean investments in crypto firms soared to $1.48 billion in 2021, 10 times the amount amassed by the rest of the region in the same year.

Singapore is one among the nations with the greatest adoption rates, according to Gemini's 2022 Global Crypto Index. More than 30% of the country owns cryptocurrency, with two out of every five female investors. Over 42% of Singaporean investors use cryptocurrency to hedge against inflation.

Singapore has been experimenting with Central Bank Digital Currencies (CBDC) since 2021, well ahead of other EU countries and the US. The government even extended a kind hand to China in order to work on the development of its digital yuan.

Singapore's largest banks are likewise aiming to expand countrywide usage. The government has initiated a digital asset initiative to investigate the possibilities of DeFi projects. Singapore has never banned or penalized anybody, with the exception of making licensing difficult and banning Russia owing to its conflict with Ukraine.

Changing cryptocurrency sentiment

During the present bad market, Singapore's inclusive mentality is shifting.

Following the insolvency of Singapore-based 3AC, the MAS publicly chastised the Capital for mismanaging its assets. While the public humiliation had no legal ramifications for 3AC, MAS started a thorough inquiry to uncover the causes for the bankruptcy.

Singapore announced a shift in its approach for the first time in June 2022, when MAS's Chief Fintech Officer Sopnendu Mohanty stated that they had lately been unfriendly to crypto firms. He stated:

“We have no tolerance for any market bad behaviour. If somebody has done a bad thing, we are brutal and unrelentingly hard We have been called out by many cryptocurrencies for not being friendly.”

On July 5, a month later, the nation went a step further, saying it was investigating new legislation to safeguard investors from similar crashes to 3AC. Singapore also mentioned the necessity for worldwide crypto regulation, implying that they concur with the recent US Treasury request. The new regulation's reach has not been published.

** Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of USA GAG nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

Follow us on Google News

Filed under