Singapore Regulator Crackdown on Cryptocurrencies

Singapore’s financial regulator and central bank have vowed to be “brutally and unrelentingly tough” on any “bad behavior” from the cryptocurrency industry.

The comments come from Monetary Authority of Singapore (MAS) chief financial technology officer Sopnendu Mohanty, explaining in an interview that “if someone has done something wrong, we are brutal and relentlessly tough.”

He also responded to rhetoric from certain crypto market participants who criticized the regulator for not being crypto-friendly enough and instead questioned the legitimacy of the market, saying:

“Many cryptocurrencies have called us out for not being friendly, my response has been: friendly for what? Friendly to a real economy or friendly to some unreal economy?”

The fintech chief believes the world is “lost in private currency” and is the cause of the broader market turmoil. Mohanty added that the city-state enacted an “extremely draconian” and “painfully slow” due diligence process for licensing crypto firms in response to the regulator’s conservative stance toward cryptocurrencies.

Singapore introduced licensing for crypto businesses in January 2020 and has been strict about which businesses are approved for a license. Cointelegraph reported in December 2022 that MAS had revoked the approvals of more than 100 company licenses they had applied for.

In January, cryptocurrency providers were banned from advertising their services in public areas such as public transportation, which was extended to public websites as well as print, broadcast and social media.

MAS is also expanding its ability to monitor crypto companies; In April, the regulator approved new requirements for companies to obtain a license and be subject to anti-money laundering and anti-terrorist financing requirements if they wish to provide services outside the country.

Related: Singapore to Explore Tokenization of Digital Assets on Public Chains

Many crypto businesses settled in Singapore due to both its low taxes and the perception that the city-state was one of the most crypto-friendly, but regulatory tightening suggests that is changing as the country focuses in its Central Bank Digital Currency (CBDC). ).

On June 21, payment system provider Mojaloop Foundation opened a CBDC Center of Excellence (COE) in Singapore that has MAS on its Working Group and Mohanty as an advisor to the board.

With the opening of the COE, Mohanty believes a state-backed alternative cryptocurrency could be launched within three years.

The COE aims to reduce the costs and inefficiencies of payment platforms and cross-border payments, Mohanty said he welcomed the move as a “step into the future of financial services.”