Ravi Menon, the managing director of the Monetary Authority of Singapore, or MAS, said companies often labeled by the media in connection to the recent market volatility as “Singapore-based” were not representative of the country’s approach to crypto regulation.
In a speech on the MAS Annual Report on Tuesday, Menon said crypto-related companies including TerraForm Labs and Three Arrows Capital, or 3AC, had “little to do” with crypto regulation in Singapore. According to the MAS managing director, Three Arrows Capital was not regulated under the country’s Payment Services Act and had “ceased to manage funds in Singapore” prior to reports it failed to meet margin calls.
Menon also pushed back against associations with TerraForm Labs and Luna Foundation Guard — the platforms behind TerraUSD (formerly UST) depegging from the U.S. dollar — saying the firms were “not licensed or regulated by MAS, nor have they applied for any licence or sought exemption from holding any licence.” Crypto lending firm Vauld, which suspended withdrawals, trading and deposits in July, has applied for a license to operate in Singapore but was operating unlicensed along with Terra and Luna amid the market downturn.
“The crypto industry globally is still evolving and regulation is still catching up with industry trends,” said Menon. “Singapore is often seen as being at the forefront, with a clear licensing and regulatory framework. But 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.”
The MAS managing director added that the financial watchdog would be consulting on measures aimed at a regulatory framework covering “consumer protection, market conduct, and reserve backing for stablecoins” in the next few months. In July, Singapore senior minister and MAS chair Tharman Shanmugaratnam hinted at rules limiting crypto investments for retail traders and the use of leverage for crypto transactions.
MAS chief fintech officer Sopnendu Mohanty said in June that the regulator would “be brutal and unrelentingly hard” on crypto firms exhibiting bad behavior. The financial watchdog later reprimanded 3AC for providing false information, alleging the company had assets under management in excess of the permitted amount under regulatory guidelines.
“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,” said Menon.