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The collapse of the $40 billion Terra ecosystem has caused regulators around the world to be more vigilant of their respective crypto industries. For instance, Singapore’s central bank is hinting that it will impose harsher penalties for those who exhibit “bad behavior” in the crypto industry.
This was revealed by Sopnendu Mohanty, the Sopnendu Mohanty, the chief FinTech officer at the Monetary Authority of Singapore (MAS), the island nation’s central bank and financial regulatory authority. In an interview with the Financial Times, the executive said that the central bank will be “brutal and unrelentingly hard” on bad behavior in the crypto industry.
“We have no tolerance for any market bad behavior,” the chief FinTech officer said, according to Coindesk. Mohanty’s comments came after the collapse of the UST stablecoin and the LUNA crypto in mid-May. Terraform Labs, the company behind the stablecoin, was based in Singapore.
The MAS FinTech Chief appears to be also questioning the value of private crypto. During the interview with FT, Mohanty said that people usually comment on Singapore being not friendly when it comes to crypto.
“Friendly to what? Friendly for a real economy or friendly for some unreal economy?” is his usual retort to those questions, Pymnts.com reported.
While Moharty appeared to be dismissive of private cryptos, he expressed support for the development of a central bank digital currency (CBDC), In fact, the FinTech head said that he expects that a state-backed alternative to crypto will be available in three years.
Singapore attracted many crypto businesses in the past thanks to its low taxes and its welcoming regulatory climate. However, the market downturn has made regulators take a harder stance on crypto.
Mohanty said that Singapore has recently come up with a “painfully slow” and “extremely draconian due diligence process” when licensing crypto firms. The FinTech Chief said that the aim of the new measures is to protect the wider economy.
Understandably, many crypto firms have opted to relocate their operations elsewhere. For instance, Binance shut down its Singapore unit and decided not to pursue its application for a license. Meanwhile, hedge fund Three Arrows Capital said in April that it will leave Singapore and transfer to Dubai.
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