Market Analysis Report (29 Aug 2022)

The Monetary Authority of Singapore (MAS) is intensifying its surveillance of digital asset firms within the city-state ahead of upcoming regulatory changes. The authoritative body sent a questionnaire to some applicants and holders of its digital payments license seeking highly granular information about their business activity and holdings.

The regulator enquired about the top tokens owned by individuals, as well as different lending and borrowing counterparties and the amount loaned and the top tokens staked via DeFi protocols. The MAS is also examining processes followed by digital asset exchanges once they receive a digital payment token service license, in an attempt to better understand the risks associated with the process. 

The increased scrutiny comes ahead of changes to digital asset regulation within Singapore. Managing Director of MAS, Ravi Menon, has already announced that the scope of these regulations will be extended to cover more activities. The increased regulation follows the recent market fallout which has seen numerous crypto lenders and crypto hedge funds collapse, including Three Arrows Capital, Zipmex, Hodlnaut, and Vauld.

“Licensees and applicants are expected to notify MAS of any events that materially impede or impair the operations of the entity, including any matter which may affect its solvency or ability to meet its financial, statutory, contractual or other obligations,” an MAS spokesperson said in response to queries from Bloomberg News regarding the questions sent to the crypto firms. MAS is unable to share details of dealings with individual firms, citing confidentiality, the spokesperson added.