Singapore’s ambitious cryptocurrency sector, by some measures the Asia-Pacific region’s largest, faces an uncertain future after the recent collapse of crypto fund Three Arrows Capital Pte Ltd (3AC, 三箭資本), a high-profile casualty of the global digital currency downturn.
Crypto players in Southeast Asia’s financial hub are bracing for further bankruptcies and legal tussles, and expect that regulators at the Monetary Authority of Singapore (MAS), whose welcoming approach helped to attract firms from China, India and elsewhere, might become less accommodating.
“After recent events it appears likely that the MAS will get tougher on crypto and digital assets,” said Hoi Tak Leung (梁愷德), a senior technology sector lawyer at Ashurst LLP.
Photo: Bloomberg
Investment in Singapore’s crypto and blockchain companies surged to US$1.48 billion last year, KPMG said, 10 times the previous year and nearly half the Asia-Pacific total for the year.
Regulators at the MAS have said they hope to encourage crypto-related services, a sharp contrast with China’s ban, a crypto tax in India that has crippled trading and incoming rules in Hong Kong restricting crypto investing to professionals.
More than 150 crypto companies applied for a new crypto payments license from the MAS in 2020, although so far only a handful have received one.
However, the picture has grown murky with the collapse of 3AC, which began liquidation proceedings in the British Virgin Islands on June 27, court filings showed, after the global downturn in digital currencies left it unable to meet hundreds of millions of dollars in obligations.
3AC did not respond to a request for comment and its liquidators told a US bankruptcy court that they cannot locate the fund’s founders, Kyle Davies and Zhu Su (蘇朱).
The ripple effects of 3AC’s collapse — and the subsequent market turmoil — have been swift and severe. Singapore-based crypto lending and trading platform Vauld last week said that it would suspend withdrawals, and the following day a rival crypto lender said it planned to acquire the company.
Another fund, Mirana, is suing 3AC in Singapore over a loan agreement, local media reported, citing court filings which are not available publicly.
Mirana did not reply to requests for comment.
In the US, crypto lender Voyager Digital Ltd filed for bankruptcy last week, days after 3AC defaulted on a crypto loan worth US$650 million it was owed, while crypto exchanges Genesis and Blockchain.com have also disclosed losses on their dealings with 3AC.
Rose Kehoe, managing director in Kroll’s restructuring practice in Singapore, said that in the coming weeks she expects crypto-related businesses facing liquidity issues to use Singapore’s mechanisms for court protection of companies in restructuring.
“We will continue to see crypto markets globally being impacted by the contagion effect of recent market events, including in Singapore, a major cryptocurrency hub,” she said.
Sector players are also wary of how Singapore’s regulators might react.
“If Singapore decides to take a more hawkish approach towards crypto businesses in future, other countries in [Southeast Asia] could follow suit,” said Jeff Mei, chief marketing officer at ChainUp, a Singapore crypto company. “[This] could open a gap for Hong Kong to step into the arena more meaningfully.”
MAS did not comment on the matter, but on June 30 it issued a rare public reprimand to 3AC for breaching fund rules and added it was investigating the company on potential further breaches.
“I think [MAS] wanted to send a signal to the industry to say: ‘3AC was already on our watch list,’” said Hagen Rooke, a Singapore-based partner at law firm Reed Smith LLP.
He said that such misdemeanors would normally be handled with a private rap on the knuckles.
“The question is whether the MAS is going to become even more draconian in its approach to the crypto industry,” he added, identifying new rules around crypto borrowing and lending as one likely regulatory focus.
Elon Musk’s lieutenants have reached out to chip industry suppliers, including Applied Materials Inc, Tokyo Electron Ltd and Lam Research Corp, for his envisioned Terafab, early steps in an audacious and likely arduous attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc and Space Exploration Technologies Corp (SpaceX) have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they’ve contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to
JET JUICE: The war on Iran’s secondary effects have seen fuel prices skyrocket, knocking flight schedules down to earth in return as airlines struggle with costs Airline passengers should brace for more irritation in the next few months as carriers worldwide cancel flights and ground planes to cope with stratospheric increases in jet-fuel prices. Dutch flag carrier KLM is the latest company to cut its schedule, saying on Thursday that it would scrap 80 return flights at Amsterdam’s Schiphol Airport in the coming month. That puts it in the same league as United Airlines Holdings Inc, Deutsche Lufthansa AG and Cathay Pacific Airways Ltd, which have all pruned itineraries to mitigate costs. Global capacity for next month has been reduced by about 3 percentage points, with all
Taiwan is attracting a growing number of foreign jobseekers as companies increasingly recruit overseas talent to ease labor shortages and expand global reach, recruitment platform 104 Job Bank (104人力銀行) said yesterday. More than 40,000 foreign nationals searched for jobs in Taiwan through the platform last year, a 28 percent increase from a year earlier, the company said. Malaysians accounted for the largest share of overseas jobseekers at 12.2 percent, followed by Indonesians at 11.9 percent and Vietnamese at 10.8 percent. Indonesian applicants surged more than 50 percent year-on-year, while Vietnamese jobseekers rose by more than 30 percent. Applicants from the
NO SHORTCUTS: Asked about Elon Musk’s Terafab initiative, TSMC CEO C.C. Wei said it takes two to three years to build a fab and another one to two to ramp it up Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised its revenue growth forecast for this year to above 30 percent, up from the 25 percent it estimated three months earlier, citing extremely robust artificial intelligence (AI)-related chip demand. “Our customers and customers’ customers, who are mainly cloud service providers, continue to send us very positive signals and outlook,” TSMC chairman and CEO C.C. Wei (魏哲家) said at an earnings conference. The company also hiked its capital expenditure for this year toward the higher end of its forecast, or US$56 billion, as it aims to step up advanced chip capacity expansions, such as
RSS