Previous Climate and Regulation

When the bull market took off a couple of years ago I found it fascinating to see how different countries addressed this new industry and the wealth it was generating. Different regions of the world adopted different stances and every once in a while you would have a country stick out for one reason or another. In the case of South East Asia, this could not be more clear with Singapore's stance and governance compared to other countries in the region. 

Singapore has long been a financial capital and has benefitted from the city's government and status to attract businesses to set up shop there. With that in mind part of me is of the mind that it should be no surprise that with this new industry emerging and countries like China and India forcing those companies out that Singapore would take a different approach and welcome them. Unlike most other countries Singapore put in place some rules and regulations to establish a base of rules and regulations. The Monetary Authority of Singapore (MAS) which was assigned to be the crypto regulator in Singapore took an active role in encouraging crypto-related services and granted those who applied and were qualified with a crypto payments license. Out of all of the different places that listed their base of operations as Singapore TerraForm Labs and the Luna Foundation Guard are likely the most well known. 

All of this recruitment and encouragement of companies to locate in Singapore was done for one reason. To be a crypto hub as others have tried to be. Singapore was successful in its recruitment as we can see from a variety of ways be it the number of companies, the amount of money invested or raised by these companies, or any other number ways. However, when the market turned south and LUNA broke and collapsed a stain was left on not only Singapore's financial capital reputation but also its pride as well. 

Future Outlook

The sudden and complete collapse of LUNA and UST just plain devastated the crypto market at a time when it was already struggling. As UST became depegged and efforts were made to save it billions in Bitcoin were dumped onto the market along with other crypto assets owned by TerraForm and the Luna Foundation Guard. By the time the collapse ended the ripple effect had torn through the market causing the collapse of other funds and companies which can be illustrated with this picture. 

Now that the turbulence has subsided Singapore's MAS has already begun announcing changes to how they will not only regulate crypto and crypto companies now but also going forward. I do not think this should be a surprise as this collapse erased $40 billion + off of the crypto market and cost some people everything that they had saved. While nothing has been finalized one of the key things that have been announced is that moving forward Singapore will be in line with international regulators. This has tended to not be the case as Singapore was the trailblazer when it came to handling and regulating crypto companies and cryptocurrency. 

There are a variety of options that Singapore could pursue to better or more efficiently regulate companies however one thing does stick out to me that I do not see in other countries. TerraForm Labs, Luna Foundation Guard, Three Arrows, and Vauld all were headquartered in Singapore however NONE of them held permits under its licensing system for virtual-asset service providers. The way that I see it is that these companies all exploited Singapore's reputation to the everyday person. By doing this they were able to benefit immensely and at the same time not have to follow the strict rules of Singapore's crypto regulation system. Individuals and companies across the globe thought that these companies were a lot more viable than they actually were and have thus suffered immensely from the collapse.

Already Singapore has begun clamping down with restrictions on marketing these crypto products as well as requiring virtual-asset providers to be licensed locally even if they only do business overseas. Next month MAS will be holding a seminar to announce and explain its position on crypto regulation and what it will be doing moving forward.  

Please know I am not a financial advisor and make sure you do your own research! If you enjoyed this article and would like to further support me below are a few referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_

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