Singapore has disowned the activities of the collapsed
cryptocurrency project Terraform Labs, saying the platform was not performing
activities requiring a license from MAS and was neither licensed nor exempted
from licensing by the regulator. The City state has also downplayed the impact
of the Terraform Labs saga on its financial systems.
Responding to a question by a member of parliament,
Lawrence Wong, the Deputy Prime Minister and Minister for Finance and Chairman
of MAS, said that the collapse of Terraform Labs sparked concerns about
regulatory oversight and investor protection in the cryptocurrency market. The
event has prompted Singaporean authorities to reevaluate and reinforce
regulations to mitigate risks in the crypto space.
Enhancing Regulatory Measures
In response to the incident, MAS has implemented
several measures to bolster the regulatory framework for cryptocurrency
investment firms operating in Singapore. These measures aim to enhance consumer
protection and mitigate systemic risks associated with cryptocurrency trading.
MAS mentioned: “We also remind those who trade
cryptocurrencies that MAS’ rules and regulations cannot prevent monetary losses
arising from such activities. Consumers must be aware of the risks of doing so
and understand that cryptocurrencies are highly volatile and have no intrinsic
value.”
MAS has introduced consumer access measures focused on
retail consumers, aligning with international standards on regulating
cryptoassets. These measures include assessing customers’ awareness of risks
before granting trading access, prohibiting incentivized trading offers, and
restricting the provision of credit or leverage to consumers.
Moreover, MAS has imposed business conduct
requirements on cryptocurrency platforms to ensure proper segregation and
custody of customers’ assets, mitigate conflicts of interest, and implement
robust risk management processes. These enhanced measures will be implemented
in phases commencing this year.
Educational Outreach
MAS emphasizes the importance of consumer awareness
regarding cryptocurrency trading risks. While regulations can mitigate certain
risks, consumers must understand the volatile nature of cryptocurrencies and
their lack of intrinsic value. Ultimately, investors bear responsibility for
their investment decisions in the crypto market.
Meanwhile, the Securities and Exchange Commission
(SEC) of the United States is seeking $5.3 billion from Terraform Labs and its
co-founder, Do Kwon. This…
