Singapore Refines Its Crypto Regulations

high profile crypto company failures and market meltdowns. Several of the biggest casualties of the chill of this current crypto winter operated out of Singapore. It was a base for Three Arrows Capital, the disgraced Crypto hedge Fund. It was home to Vould, zip Max, and hoddle Knot, all of which have sought detection from their creditors after being unable to meet their financial obligations. These high profile collapses have shunn a harsh light on Singapore's regulatory framework. So what's

next for crypto and Singapore? For more? I'm joined by Bloomberg Reports, Joanna Ostenga and Suva shri Gosh in this reason as we're calling it on the show and everywhere else. Crypto Winter, Singapore has really emerged as one of the jurisdictions where things do not seem to have gone quite according to plan, either for the cryptocurrency companies that were operating in the region or for the regulators responsible for

those companies themselves. Do you want to just to start with you, how long has Singapore had some kind of regulatory framework for crypto and what's been going on with

that recently? They actually got started ineen looking at blockchain, and so they've been looking at the edges of it, looking at the technology for quite a while, much earlier than a lot of jurisdictions, and a couple of years ago they decided they wanted to do this licensing framework for it, and that has been something that's gotten a

lot of applicants a lot of interest. UM. The approvals have gotten a little more slowly than some people may have thought they would, but there is still a premium about being regulated by Singapore, which is seen generally as a government that um is pretty forward thinking. Who have been the major companies in Singapore that are operating in and around crypto and what's been going on there over

the past few months. The biggest shock has come from Singapore in the sense that you know, the huge crypto had fund which is one of the biggest, the largest one actually globally, Three Arrows Capital, they had to file bankruptcy and that was one of the biggest even that Singapore saw in the last few months. So you mentioned Three Arrows Capital and you mentioned that they were at their peak where they are no longer. They were one of the largest, if not the largest crypto hedge fund

in the world. There are a lot of people right now who are looking at their accounting with a degree of skepticism about the assets that they had on their management. But they started off in Singapore, but then they left Singapore in September one before all of this stuff started going down. So did the collapse of Three Arrows really

cause or lead to potentially the crypto broader crypto contagion? So, you know, Joanna, like, what was the failure here as it related to how they were regulated in Singapore before

they redomiciled in the British Version Islands. They were able to kind of get the respectability, They were able to get a lot of connections here in Singapore, a lot of high net worth people and they were able to kind of establish this groundwork that led to them being very well connected, getting a lot of loans and kind of integrating themselves into the crypto ecosystem. If there was anything,

it's probably that Singapore looks at specific things. Um, Three Arrows did have a license to manage some money, but it was a max of two fifty million dollars and they weren't supposed to go over that, and that might have been part of the reason that they left. But there are things that Singapore looks at and things it doesn't necessarily look at, and so some of the things it doesn't necessarily look at may have been some of

the things they got Three Arrows in trouble. And so that you have been reporting on some of the things that they do and don't necessarily look at. As it relates to a couple of other companies, can you share a little bit more about what that reporting has been. There are like tons, as you rightly say, right, you know, the Vault, Zip, Max, Hoddle, not all three we've seen

in quick succession. How they have you know, completely had to grew off rather right, really, I mean because you see, uh, you know, suddenly one fine morning we get information that Bold had to stop their withdrawals, and then again the same thing happened with zip Max, which is all over the Southeast Asia, and then holdle Not which actually had a license from the Singapore Central Bank. You know, so that shows that, you know, how interconnected this part of

the world is. They lent, they borrowed, they lent, and they leveraged. So eventually what happened was, you know, my loan gets bad, then the other person who also bought it from me I have to suffer from the same event. So that's what happened in this case for all these companies in singa probum. And so to that point about what shall we describe as like the turmoil that's currently

affecting the crypto industry in Singapore. You've both been reporting on the fact that the various regulatory agencies there are considering taking additional steps in response. And one of the areas that Ravi Menon for example, who is the head of the central bank there, is talking about is additional protections for retail investors. MS has said it wants to

attract leading crypto players to Singapore. On the other hand, MS has a stringent and lengthy licensing process for those who want to carry out crypto related services in Singapore and MS has also been issuing strong warnings against retail investments in cryptocurrencies and has been taking increasingly stronger measures

to restrict retail access to cryptocurrencies. What's the response been to some of those proposals, like our folks like great the song, like it's going far enough, or their additional things that people want to see. Retail investors will not like a very strict regulation where they will be told what to do and what not to do, which which is more than what to do in terms of crypti investments.

So yes, so it is likely to be an unpopular one, but of course, you know, it's for the safety and security of of investors, of people like you and me, So it's eventually expected to be intended to be actually

for a better outcome protil investors. And one of the things inasmuch as they're starting to gather that information now slightly later than some folks might have really preferred, but they don't currently hold the companies that they license subjects to things like limits on liquidity risk or you know, requiring them to safeguard customer assets and make sure, they're in sort of separate bits of the business that are

less exposed to some of those market challenges. Are those kinds of additional changes also being discus us by regulators or is it or we still in the we have to wait and see what they're eventually going to come out with phase. It does seem like they're looking at that sort of thing, and it's still wait and see. They're still developing things. But if you look at what happened with the trouble in crypto in the past few months, it seems like that would be something regulators would be

interested in. Those questions from their spreadsheets are certainly looking like they may at least be interested in it. Coming up, you'll hear more from reports Joanna Osinga and Suvashry discussing everything to do with regulation and crypto in Singapore. We'll be right back, so if I'm hearing you correctly, these sort of extremes are that in India, on the one hand, there isn't actually a regulatory framework. There's a tax framework that's kind of acting as a proxy for more formal regulation.

In Singapore on the other end, where especially right now, it looks like they're trying to tighten things up that

might have been missing before. And then in the middle you've got Dubai, where there are some rules, there's some policy, but they seem to be taking a much more explicit Hey, come to business with us kind of approach, Joanna on things that we've seen and things we're reporting on here at Bloomberg around what happened in Korea, for example, in the aftermath of Tera, Korea, much like Singapore, was one

of those jurisdictions that was perceived as pretty sophisticated. You know, it had pretty good guidelines and interest in blockchain and crypto and crypto companies that led to a lot of retail and consumer interest. There was a lot of activity that was happening over there that's now going through a reckoning. In the aftermath of the collapse of Luna and Terra, people were very upset, are very upset with Kwan, who

was the founder of these entities. Are you seeing any parallels in Singapore to that kind of public anger that we're witnessing in Korea or is Singapore Is this a very different conversation. It feels somewhat different. The Monetary Authority of Singapore has been reminding people all the time about the dangers of crypto. In a speech on Tuesday, the Deputy Prime Minister said the crypto space is a highly risky area and investors have suffered losses or even lost

their life savings. And it feels like most of the people here who might have lost money would have been more along the lines of high net worth people or people who had some sense of the risks that they were taking with it. And I'm sure there were probably some people who lost money that they couldn't afford to lose, but there is not so much a public uprising, and of course that doesn't necessarily happen and as much in Singapore anyway, but it is more they just don't want

the public to invest in crypto. But it's more of an academic discussion of how to handle it, as opposed to say the public anger or anecdotes about things happening

to the average person on the street. That's helpful context and super just a sweepy question for you, as someone who recently moved to Singapore, what do you think have been some of the biggest differences in reporting on things like crypto and fintech In a jurisdiction like Singapore as opposed to some of these other places that you've been covering.

I think, you know, the biggest difference is again regulation, Like you know, I've covered India in in my previous role in terms of fintech and also crypto, and I think the we we used to look at that particular regulatory regime is you know, let it grow, and there is no idea or no clarity about how to regulate the system. So it's really like, you know, nobody's baby

there in India. And however, when we've moved to this part of the world, which is you know, Singapore, which is a little more regulated, not little actually I would say a lot more regulated than compared to India, also not more organized. So in that sense, yes, there is a first mover advantage or one of the early movers advantage for Singapore compared to India. However, I would also like to add, you know, apart from Singapore, there is

other countries in this region, like China. You saw how they completely banned the crypto and then Japan interestingly slowly warming up to crypto now, so there is a lot of you know, different style and approach to this entire sector when you look at now and when you look at maybe two years prior. Yeah, so that's how it is. It's not uniform across. Thank you, Johanna, and thank you Suva.

Thank you, thank you for having us here. You can find more of Johanna's and subas reporting on the Bloomberg terminal on Bloomberg dot com or follow them on Twitter. Joanna is at ossenger J that's O S S I N G E R J. And Suva is at Suva Journal. That's s U V A J O U R n oh. This is Bloomberg Crypto, a daily podcast from Bloomberg and I Heart Radio. For more shows from I Heart Radio, visit the I Heart Radio app, Apple Podcasts, or wherever

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