The Monetary Authority of Singapore (MAS), the country’s central bank and financial regulator, will not tolerate bad behavior in the crypto industry, according to its chief fintech officer, Sopnendu Mohanty.
“We have no tolerance for any market bad behaviour,” Mohanty told The Financial Times in an interview published on Thursday. “If somebody has done a bad thing, we are brutal and unrelentingly hard.”
Mohanty’s comments come amid crypto market turbulence caused by the collapse of Singapore-based Terraform Labs’ two tokens — terraUSD (UST) and terra (luna) — which wiped out $40 billion of investor wealth.
The implosion of Terra has led to crises for another Singapore-based crypto firm, hedge fund Three Arrows Capital. The fund suffered significant losses on its luna investment and the subsequent market downturn led to forced liquidations. Three Arrows Capital is unable to pay its debt, and as a result, several lenders are facing financial problems, including BlockFi and Voyager. Both recently received credit facilities from FTX’s sister firm, Alameda Research.
According to Mohanty, the current market turmoil is a result of the world at large being lost in “private currency.”
He went on to suggest that the MAS will not easily grant licenses to crypto firms. The regulator has enforced a “painfully slow” and “extremely draconian due diligence process” for licensing crypto firms, he said.
To date, the MAS has approved only 14 companies to offer crypto services. Earlier this week, the regulator gave in-principle approval to Crypto.com, Genesis and crypto trading platform Sparrow.
Overall, there has been a stark change in how Singapore views the crypto industry. The country previously openly courted the sector, but in recent months amid its harsher approach, crypto firms have moved to other countries, including Dubai.