beincrypto.com
Singapore’s future development as a cryptocurrency hub has been placed in doubt by the recent downturn in the global markets.
Crypto and blockchain companies in Singapore received $1.48 billion in investment last year, according to KPMG. This amounts to an order of magnitude higher than the year prior, while nearly half the Asia Pacific total for that year.
Yet, due to the latest high-profile casualty of the current digital currency downturn, the recent collapse of crypto fund Three Arrows Capital, crypto players in Southeast Asia’s financial hub are now expecting mounting bankruptcies and legal troubles.
In the coming weeks, Rose Kehoe, managing director in Kroll’s restructuring practice in Singapore, said she expects such crypto-related businesses facing issues to take advantage of Singapore’s mechanisms for court protection of companies in restructuring.
“We will continue to see crypto markets globally being impacted by the contagion effect of recent market events, including in Singapore, a major cryptocurrency hub,” she said.
MAS reaction
Sector players have also become increasingly wary of how Singapore’s regulators could react to this. While regulators at the Monetary Authority of Singapore (MAS) had previously said they had hoped to encourage crypto-related services, “after recent events it appears likely that the MAS will get tougher on crypto and digital assets,” said Hoi Tak Leung, a senior technology sector lawyer at Ashurst.
“If Singapore decides to take a more hawkish approach towards crypto businesses in future, other countries in (Southeast Asia) could follow suit,” said Jeff Mei, chief marketing officer at Singapore crypto company ChainUp. “(This) could open a gap for Hong Kong to step into the arena more meaningfully.”
In contrast to Singapore’s open approach, other authorities in the region have already taken a restrictive approach to cryptocurrencies. This includes China’s ban, a crypto tax in India that has crippled trading, and incoming rules in Hong Kong which would restrict crypto investing to professionals.
MAS has yet to comment on the matter, but issued a rare public reprimand to 3AC on June 30 for breaching fund rules, adding that it was investigating the company for potential further breaches.