Singapore is an island and city-state situated in southeast Asia. The city is a key crypto player in the Asian continent as it plays in the same league as other Asian cities, Dubai and Hong Kong. Singapore is looking to cement itself as a crypto hub and home to web3-powered businesses in a sector that is growing rapidly.
Singapore is therefore, collaborating with local banks with an objective of developing uniform standards for evaluating customers in the digital asset industry. This comes in the wake of a turmoil that has rocked the global crypto ecosystem due to closure of several giant financial institutions that were crypto-friendly and major investors in the sector. The crypto winter began with the collapse of FTX – one of the prominent firms in the industry.
The Monetary Authority of Singapore and law enforcement agencies have been closely working with lenders in the country to streamline and refine their approach on financing crypto providers. According to reports, this initiative has been ongoing for at least 6 month. This initiative has its eyes firmly focused on risk management and due diligence is imminent in 2 months.
The imminent guidelines are set to also touch on stablecoins, transferable gaming and streaming derivatives as well as NFTs. It is crucial to mention that the acceptance of the regulatory scheme by banks will purely be fueled by their tolerance and appetite to risk. Currently, the law in the city requires banks to conduct their due diligence in vetting their customers so as to manage the risk posed to them if they choose to offer their services to these customers.
Singaporean Law however, does not restrain banks from financing digital asset firms. That notwithstanding, some digital asset management firms have encountered difficulty in creating accounts with Singapore banks because of fear of facilitating illegal cashflows and other illegal activities like money laundering. Singapore has joined other countries in creating regulations in the crypto sector to put more restrictions on crypto trading by retail customers and curb illegal activity.
Singapore has in recent days witnessed its fair share of collapse crypto forms including crypto hedge fund, Three Arrows Capital. The most prominent in the country is TerraForm Labs that saw Singaporean authorities launch a manhunt for Do Kwon, TerraForm’s co-founder. The co-founder managed to flee into hiding but has since been apprehended following a rigorous multi-agency exercise to smoke him out from hiding.
Overseas, the US Government is taking a more brutal approach as cracks its whip on the crypto sector. Numerous lawsuits have been filed against crypto firms and their managers with US federal agencies citing money laundering and tax evasion claims as well as the ability of the platforms to finance terrorist activities.
Singapore has however, taken a more friendly stance in regulating this sector. The city is also joined in its stand by Hong Kong which had to back down owing to the fact that its hostility led to the migration of numerous crypto firms, landing some in Singapore. Hong Kong’s relaxed stand is aimed at incentivizing the return of more crypto firms seeing as Singapore and Dubai have overtaken it in crypto investment. Singapore on the other hand, aims to retain crypto investors and attract more. This back and forth will therefore create a healthy competition that will force the three contestants to back down even further in their race to crypto supremacy in Asia. As for who wins, only time and circumstances will tell.
