SINGAPORE – Singapore plans to broaden the scope of cryptocurrency regulations to cover more activities and possibly tighten retail investors’ access to the digital tokens in new rules that could be proposed in the next few months.

The Monetary Authority of Singapore (MAS) is targeting to consult on its proposed measures around September or October this year, said its chief Ravi Menon on Tuesday (July 19).

Speaking at the launch of MAS’ annual report, he said the focus of crypto regulation in and outside of Singapore has been on money laundering and terrorism financing risks.

While most jurisdictions do not cover areas such as consumer protection, market conduct and reserve backing for stablecoins, reviews and public consultations are under way among international regulators to strengthen regulation in these areas, Mr Menon noted.

“Going forward, in line with international regulators, we’re also going to be broadening the scope of regulations to cover more activities. So players who are doing some of these activities, but are currently not caught, may well be caught. It’s hard to say,” Mr Menon said.

He said Singapore will likely see an increase in the number of entities that require licensing.

Mr Menon noted that some troubled crypto firms reported as based here have “little to do with crypto-related regulation in Singapore”. He cited TerraForm Labs and Luna Foundation Guard, which were behind the collapsed TerraUSD stablecoin, saying they were not licensed or regulated by MAS, nor had they applied for any licence or sought exemption from holding one.

Bankrupt hedge fund Three Arrows Capital was a registered fund management firm here, but had ceased to manage funds in Singapore prior to the problems leading to its insolvency, Mr Menon noted, while crypto lender Vauld had submitted a licence application, which is pending review.

His remarks come as prices of crypto have slumped and the spate of bankruptcies and financial distress has roiled the market, with more than US$2 trillion (S$2.8 trillion) wiped out since November.

The key lesson from the upheaval in the global crypto industry is clear – that investing in crypto is highly risky, said Mr Menon.

“In fact, MAS has repeated warnings against retail investments in cryptocurrencies, and ratcheting up of policies to restrain retail access has raised some questions as to where MAS stands with respect to the digital asset ecosystem,” he said.

To set out the regulator’s stance, MAS will organise a seminar next month to share its strategies to develop Singapore as a digital asset hub.

“We do want good, strong, crypto players to be based here and to do solid innovation work out of Singapore, and that’s what our licensing regime aims to achieve,” the MAS chief said.

He added that MAS is actively promoting the digital asset economy where it can use technologies to solve real issues including cross-border settlement and cross-border trade and finance.