Singapore has been hailed as Asia’s natural home for cryptocurrency. It has a fair, swift, and effective legal and regulatory system, clean air, and a population that speaks English fluently. Lee Kuan Yew, the country’s strongman creator, felt that thriving societies are those in which the wealthy are not above the law; civil workers are well compensated to ensure that they are immune to bribes. Judges must rule on commercial issues based on precedent, not on favors or relationships.
However, something unexpected happened in Singapore’s crypto industry this week. The Monetary Authority of Singapore, the central bank and regulator, placed DeFiance Capital, one of the many crypto funds registered in the city, on an “Investor Alert List.”
MAS described the Investor Alert List as “a list of unregulated individuals who, based on information obtained by MAS, may have been mistakenly perceived as licensed or regulated by MAS.”
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MAS did not answer to a CoinDesk request for a full explanation of why DeFiance Capital was included on the list but not any of its counterparts registered in the city, such as Three Arrows Capital.
“Inclusion on the IAL bears no inference of legal illegality,” DeFiance Capital informed CoinDesk, “but simply reflects that DeFiance Capital, like many other crypto-native VCs in Singapore, is not yet licensed by MAS.”
DeFiance Capital, on the other hand, isn’t sure what happened.
“Right now, we’re working to figure out how this problem arose.” Prior to this, we were aggressively working with MAS to communicate our operations in Singapore,” the fund said in an email to CoinDesk, adding that its investment and operational activities are unaffected.
Although being on this list does not imply any wrongdoing, casual viewers may be confused when they see a fund’s name – rather than those of its peers – on an “Alert list.”
This is unusual for Singapore, where the regulatory process is transparent, which sets the place apart from its competitors. Regulatory black holes, where things are decided on a whim or by royal decree without explanation, belong in other countries, not in a country seeking to be Asia’s major financial hub.
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