On Monday, Singapore intensified its crypto exchange regulations, driven by concerns over money laundering and dwindling market confidence after major scandals. The Monetary Authority of Singapore mandated digital token service providers serving only international clients to obtain a license or cease operations. This move aims to bolster Singapore's image as a safe financial hub amid recent high-profile failures, like the bankruptcies of Three Arrows Capital and Terraform Labs, both of which highlighted risks prevalent in unregulated crypto activities. Analysts praised these licensing requirements as necessary for maintaining financial integrity and compliance with international standards.
The money laundering risks are higher in such business models and if their substantive regulated activity is outside of Singapore, the MAS is unable to effectively supervise such persons.
With the new DTSP regime, MAS is reinforcing that financial integrity is a red line. The goal is to insulate Singapore from the reputational risk.
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