The Monetary Authority of Singapore (MAS) is currently making several inquiries from crypto companies within its borders in preparation for more comprehensive crypto regulation.
According to a Bloomberg report, the proposed regulation may turn out to be too strict for crypto firms to operate freely.
The Singapore government has often boasted of a safe hub for cryptocurrency trade with its fair regulations on digital assets. That narrative is now gradually changing.
The various events that have rolled out as a result of the prolonged crypto winter, witnessing the bankruptcy of some crypto firms in Singapore, as well as the loss of investments in crypto assets have now attracted the attention of the MAS.
While the source cited in the Bloomberg report remains anonymous, it was confirmed that questionnaires have been sent to licensed crypto companies in Singapore, demanding to know the total token in their reserves, how they are connected with other lending firms, and the tokens staked through DeFi protocols.
The current regulation adopted by the MAS only covers issues relating to crimes such as money laundering, fraud, and terrorism. This new development, however, will usher in the unveiling of new and modified regulations regarding cryptocurrencies in Singapore.
A spokesperson for MAS notes that both the licensed and applicant crypto vendors in the country are to report to the MAS on whatever challenges their business may be experiencing so as to salvage the situation before it becomes irreparable.
A legal professional in Singapore, Hagen Rooke said that the numerous uncertainties that have plagued the crypto ecosystem in Singapore have spurred the MAS to reconsider its regulations on crypto. He added that “it is possible that measures under consideration include requirements for MAS-regulated firms to obtain collateral when lending crypto,” so as to minimize risks remarkably.
While trading cryptocurrency involves lots of risks, Singapore’s financial watchdog, MAS has often deployed various measures to ensure a safe haven for crypto users within its borders.
In July, the regulator announced through its senior minister, Tharman Shanmugaratnam that it will be imposing stricter measures on cryptocurrency trade within its borders.
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