'Singapore-based' Crypto Firms Leading Market Meltdown Were Not Regulated, Central Bank Chief Says

Troubled companies like Three Arrows – reported by the media as being based in Singapore – have "little to do" with local crypto regulations, said the head of the Monetary Authority.

AccessTimeIconJul 19, 2022 at 3:39 p.m. UTC
Updated May 11, 2023 at 3:45 p.m. UTC

Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), says troubled crypto firms reported by the media as being based in Singapore are not fully regulated in the country.

Menon focused in particular on crypto hedge fund Three Arrows Capital and Singapore-registered companies TerraForm Labs and Vauld during a press briefing for the presentation of the central bank's annual report.

"In reality, these so-called “Singapore-based” crypto firms have little to do with crypto-related regulation in Singapore," Menon said.

Crypto markets have shed around $2 trillion in a matter of weeks during the recent market downturn, prompting Singapore – a jurisdiction that took a leading role in setting up a regulatory framework for crypto companies – to harden its position on digital assets.

The MAS, the country's central bank, is continuing to distance itself from embattled crypto firms with ties to the Southeast Asian nation. In June, the MAS reprimanded Singapore-born Three Arrows Capital, which is currently facing liquidation, for allegedly misleading regulators with false information and exceeding the threshold of assets it could manage in Singapore.

Menon said the fund was not regulated under the country's Payment Services Act.

"It had operated under the registered fund management regime to carry out limited fund management business, but had ceased to manage funds in Singapore prior to the problems leading to its insolvency," Menon said.

TerraForm Labs and the Luna Foundation, responsible for the collapsed stablecoin terraUSD (UST), are not licensed or regulated by MAS, according to Menon. TerraForm Labs is a Singapore-registered company but its address is of a registration agent that houses hundreds of Singaporean companies.

Menon also said crypto firm Vauld, which suspended transactions in early July and has a registration address in Singapore, is currently not licensed by MAS but has submitted a license application, which is pending review.

The central bank chief also said that most crypto regulators to date have focused on containing money laundering and terrorist financing risks, and that regulations do not cover consumer protection, market conduct or reserve backing for stablecoins.

"This is changing. Reviews and public consultations are underway among international standard-setting bodies and regulators to strengthen regulation in these areas," Menon said. He said the bank will consult on proposed measures in the coming months.

Menon said the bank will take "firm enforcement action" if any company is caught providing regulated services without a license. MAS will be "brutal and unrelentingly hard" on bad behavior in the crypto industry, Sopnendu Mohanty, the bank's chief fintech officer, said in June.


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Sandali Handagama is a CoinDesk reporter with a focus on crypto regulation and policy. She does not own any crypto.

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