3AC collapse throw monkey wrench in Singapore’s crypto endeavors

Cryptographic Hub Singapore in the Asia Pacific region expects more bailouts like Three Arrows Capital (3AC) and preparedness for possible risks in the future.

Cryptocurrency players on the market expect Singapore to be less likely to accept crypto companies in the near future.

HoiTakLeung, Senior Technical Attorney at Ashurst, mentioned the collapse of 3AC. Said Reuters:

“After recent events, MAS [Monetary Authority of Singapore] Cryptocurrency and digital assets will be even tougher. “

So far, MAS has supported attracting cryptographic companies from across the region, especially from China and India.

Singapore’s previous cryptocurrency attitude

Singapore has been using cryptocurrencies publicly for many years. The country has set a goal of becoming a regional crypto hub and has achieved that goal. The end of 2021 report states:

“Singapore occupies the top spot thanks to the booming crypto economy, positive legislation, and the second highest percentage of the world’s crypto-owning population. It’s a shy investor in crypto currencies. Not to mention the clear government strategy and strict regulations that have given Singapore a sense of security. “

Investment in Singapore’s cryptocurrency companies surged to $ 1.48 billion in 2021. This was 10 times the cumulative total of half the region of the same year.

according to Gemini’s 2022 Global Cryptographic Index, Singapore is one of the countries with the highest adoption rates. More than 30% of the country owns cryptocurrencies, with 2 in 5 female investors. Over 42% of Singapore investors invest in cryptocurrencies as an inflation hedging method.

Singapore has been experimenting with the Central Bank Digital Currency (CBDC) since 2021. This is much earlier than most EU countries and the United States. The country has reached out to China to cooperate with China in the development of digital yuan.

Singapore’s largest banks have also been working to increase national recruitment. The country recently launched a digital asset program to explore the potential of DeFi projects. Singapore has not banned or rebuked anyone except struggling to exchange Russian licenses for sanctions due to a dispute with Ukraine.

Changes in crypto sentiment

In today’s bear market, Singapore’s inclusive attitude is changing.

Following the bankruptcy of Singapore-based 3AC, MAS publicly accused the capital of mismanagement of its assets. Public shame had no legal impact on 3AC, but MAS has begun a detailed investigation to clarify the reason for the bankruptcy.

Singapore first showed a change in attitude in June 2022 when MAS Chief FinTech Officer Sopnendu Mohanty recently stated that he was not friendly to crypto companies. He said:

“We are not tolerant of bad behavior in the market. If someone does something wrong, we will be brutal and relentlessly hard. We are called by many cryptocurrencies for being unfriendly. I came. “

A month later, on July 5, the country said it was considering going one step further and applying new regulations to protect investors from conflicts similar to 3AC. Singapore also adds the need for global cryptographic regulations and suggests that it agrees with the recent call from the US Treasury. The scope of this new regulation has not been disclosed.