Singapore’s Monetary Authority is finalizing regulations targeting offshore crypto firms using the city-state for regulatory arbitrage. This crackdown appears directly tied to the 2022 collapses of Terraform Labs and Three Arrows Capital (3AC), both Singapore-based entities that exploited lax oversight.
The new rules aim to prevent repeat crises by enforcing stricter operational requirements for foreign crypto businesses servicing Singaporean clients. This includes enhanced capital adequacy rules and mandatory local presence requirements.
Industry observers suggest the measures could reshape Asia’s crypto hub landscape, potentially diverting firms to jurisdictions like Dubai or Hong Kong. The regulations reflect Singapore’s balancing act between fostering innovation and maintaining financial stability post-Terra/3AC.
