Last year, Singapore’s crypto and blockchain firms received $1.48B in investment, based on a report from KPMG. This is a thousand times greater than 2021, with around half of that year’s worldwide total.
Although owing to the most recent high-profile casualty of the current digital currency downturn, Three Arrows Capital’s recent collapse, crypto traders in Singapore’s financial capital are now anticipating legal issues, especially bankruptcies.
Managing director of Kroll’s restructuring team in Singapore, Rose Kehoe, said she expects such crypto-related firms facing difficulties to use Singapore’s court protection procedures for companies in distress.
The Monetary Authority of Singapore Reacts
The addition of a second currency, especially one which is not heavily utilized within the country’s borders, has raised concerns among sector competitors. Regulators in Singapore are also concerned about how they may react to this development.
After recent events, the Monetary Authority of Singapore (MAS) may move to discourage crypto and digital assets.
Ashurst Senior Technology Sector Lawyer Hoi Tak Leung stated, “After recent events, it appears likely that the MAS will become more stringent on cryptocurrency and digital assets.”
Compared to Singapore’s welcoming approach, other regional governments have already taken a strict stance on cryptocurrencies. This includes the strict crypto ban in China, hiked crypto tax rates in India, and continuous regulations in Hong Kong.
The United States Security and Exchange Commission (SEC) has yet to react but issued a rare public warning to 3AC on June 30 for breaching fund regulations, indicating that it is looking into the firm for possible additional breaches.
Cryptocurrency in South East Asia
Cryptocurrency is still a nascent industry in South East Asia, with trading only beginning to take off in the past few years. This has led to a wide variety of approaches by regional governments. Thailand has placed a 15 percent capital gains tax on profits, contributing to a thriving market in the country. Vietnam has banned imports of cryptocurrency mining equipment but has a largely permissive attitude towards trading.
The Philippines has been more proactive than most, creating a regulatory sandbox for fintech firms and working with exchanges to ensure best practices are being followed. The country is also home to one of the largest bitcoin exchanges in the world, Coins.
Indonesia has taken a more hostile stance. The country’s central bank has banned the use of cryptocurrencies as payment methods, and there have been several high-profile arrests of traders.
The future of Cryptocurrency in Singapore
The current market state means that it is impossible to predict the future of cryptocurrency in Singapore with any certainty. However, the recent actions of the MAS suggest that the regulator is taking a more cautious approach to the industry.
This may lead to increased regulation in the future, which could stifle innovation and investment. Alternatively, the current downturn could be seen as a necessary correction that will allow the industry to mature and strengthen in the long term.
