The Financial Authority of Singapore (MAS) has began taking measures to organize for brand new cryptocurrency rules addressing the continuing liquidity crisis and withdrawal issues.
Singapore’s central bank has sent detailed questionnaires with a applicants and holders from the MAS’ Digital Payment Token licenses, Bloomberg reported on Friday.
Sent during the last month, the questionnaires were apparently seeking “highly granular information” about business activity and holdings by examined crypto firms.
The checks were centered on firms’ financial stability and interconnection, with questions including top tokens owned, top lending and borrowing counterparties, the quantity loaned and top tokens staked via decentralized finance protocols.
Citing people acquainted with the problem, the report notes that firms were likely to respond quickly. The MAS has issued 10 licenses to crypto firms in Singapore to date, including exchanges like Crypto.com and DBS Bank’s brokerage arm DBS Vickers. That is a reasonably small percentage from nearly 200 reported businesses that have requested the license.
The most recent regulatory action in Singapore apparently aims to accentuate the scrutiny on crypto firms among approaching new rules for that industry. In mid-This summer, MAS md Ravi Menon disclosed the financial watchdog was focusing on a regulatory framework to deal with “consumer protection, market conduct, and reserve backing for stablecoins” within the next couple of several weeks.
The MAS particularly pointed at blind spots within the existing crypto rules in Singapore, noting that digital payment token providers aren’t susceptible to risk-based capital or liquidity needs. They are also not presently needed to guard customer funds or digital tokens from insolvency risks. Rather, rules mostly concentrate on money washing and terrorism financing fisks in addition to technology risks.
The MAS didn’t immediately react to Cointelegraph’s request comment. This information will be updated pending new information.
Related: Singaporean financial watchdog to see public on stablecoin regulation
Singapore’s approaching new regulatory framework for crypto comes as a result of the continuing liquidity crisis and also the connected withdrawal issues among a bear market. Three Arrows Capital (3AC), the troubled Singapore-based crypto hedge fund, went bankrupt in this crypto winter, neglecting to meet margin calls in mid-June.
Within an affidavit in mid-August, 3AC co-founder Su Zhu stated that the organization shifted its registration towards the British Virgin Islands in September 2021 after getting formerly operated from Singapore. Also, he apparently accused the liquidators of misleading government bodies about 3AC’s structure.
