According to CoinDesk, Singapore crypto rules are tightening fast, sparking major changes in the industry. The Monetary Authority of Singapore’s new crypto rule is shaking up the digital asset industry. It puts crypto firms, including big names like Terraform Labs, under strict review.
This move came after the past scandals, and many call it the most aggressive Singapore crypto crackdown so far. Although MAS has acted before, this new step to license offshore crypto providers shows a broader effort to restore trust after big company failures.
MAS Moves to Shut Regulatory Loopholes
The Monetary Authority of Singapore has announced that all crypto firms that are registered in Singapore but only work with overseas clients must now get a full license or shut down.
This rule is already affecting several platforms, including Bitget and Bybit, which are reportedly closing their operations in Singapore. Regulators say the problem with Terraform Labs and Three Arrows Capital (3AC) was a major warning sign.
Both companies were officially based in Singapore, but their actual operations were minimal. Terraform ran out of working spaces, and 3AC had already started shifting to Dubai before it collapsed. These cases showed that the rules were not strong enough, which led Singapore to take stricter action.
The Triggers Behind the Crackdown
Even though the officials have not clearly confirmed it, many people believe that the Singapore crypto crackdown is happening because of the problems caused by the collapse of Terraform Labs and 3AC. Both companies hurt Singapore’s reputation in a big way.
Market observers remember how Terraform Labs collapsed, causing huge losses and hurting Asian retail investors. Marcus Wong, a compliance expert, said that Singapore did not have real control over these companies, but still got blamed from around the world.
MAS decided to take strong action because it was not clear who had control over these firms. The updated Financial Services and Markets Act now fixes these issues. crypto firms must now follow clear rules or will have to leave the market completely.
Offshore Players Retreat Amid Licensing Pressures
As the rules become clearer, foreign-focused crypto firms are choosing to pull out. Reports say that Bitget, WazirX, and other exchanges are in the process of exiting.
This shows how serious MAS is about enforcing the new regulations. The Singapore crypto crackdown makes it clear that, if a company is linked to Singapore, then MAS wants full access and control.
Industry leaders say that this change was needed for a long time. Charmaine Tam from Hex Trust said the new rules send a strong message that if you are in Singapore, even just on paper, then you have to follow the rules.
This also shifts the focus to the crypto firms that want to stay. Now they have to meet higher standards, prices that they really operate in Singapore, and must submit to regular audits.
Conclusion
Singapore’s regulatory crackdowns show that it is getting strict with offshore crypto firms, particularly after the big failures of Terraform Labs and 3AC. The MAS now wants all firms to get licensed and is ending the loopholes.
This is meant to protect the reputation and keep the investors’ trust. Some companies might leave because of the pressure, but those who are choosing to stay must now follow stricter rules.
FAQs
1. What is the new MAS rule for crypto firms?
Crypto firms registered in Singapore but serving only overseas clients must now get a full license or shut down.
2. When will the new MAS rule take effect?
The rule will apply from June 30.
3. Why is Singapore tightening crypto rules now?
Because of past failures like Terraform Labs and Three Arrows Capital (3AC), which exposed regulatory gaps.
4. Which crypto exchanges are affected so far?
Bitget and Bybit
5. What went wrong with Terraform Labs and 3AC?
Both collapsed, causing huge investor losses and damaging Singapore’s reputation.
Glossary
Offshore Crypto Firms – Companies registered in one country but serving users elsewhere.
Full License – Official approval is needed to run crypto services legally in Singapore.
Three Arrows Capital – A failed crypto hedge fund that collapsed in 2022.
Terraform Labs – The company behind the collapsed Terra-LUNA crypto project.
Regulatory Loophole – A weak spot in rules that firms can misuse to avoid oversight.
Sources
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