Singapore becomes hotspot for crypto groups amid global crackdown

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Singapore has attracted crypto companies and executives like the big exchange Binance. Meanwhile, the rest of the world is set to crack down on cryptocurrency companies like Gemini. Crypto companies told Insider that they have opened offices in Singapore due to its regulatory environment and potential for growth. Visit the Insider home page for more stories.

As the rest of the world takes on cryptocurrencies, the island nation of Singapore is becoming a hotspot for crypto companies and global leaders with its stricter regulations and license exemptions.

Binance, the world’s largest crypto exchange in terms of trading volume, is one of the largest groups to settle in the country, with CEO Changpeng Zhao moving to the city-state in recent years.

Across the rest of the world, the exchange has faced a wave of crackdowns from various governments, mostly over concerns about unregulated activities that could be used for money laundering or terrorist financing. Thailand, Japan, the EU, Canada and the US are all investigating or taking action against Binance, and the exchange was banned in the UK in June.

But crypto players like Binance have found Singapore to be a haven of opportunity, even as a regulatory storm threatens the industry in other parts of the world.

Large crypto groups must be licensed to operate in Singapore, but may obtain licensing exemptions from the Monetary Authority of Singapore while their applications are finalized. So far, however, MAS has still not completed any applications since it introduced the concept into its payment services law in early 2020.

More than 300 companies have applied for licenses so far, Sopnendu Mohanty, MAS’s chief financial technology officer, said in an interview with Bloomberg, many of which already operate in the city-state.

Chia Hock Lai, president of the Blockchain Association of Singapore, told Insider that the straightforward regulatory process is what makes Singapore successful with crypto companies.

Cryptocurrencies are not yet legal tender in Singapore and are instead labeled as goods that can be used for exchange.

Despite this, Singapore “sees more and more institutional and auxiliary actors coming to settle,” he said.

A Bitcoin machine offers the sale and purchase of bitcoins alongside a regular ATM machine. Joseph Nair / NurPhoto via Getty Images Companies praise crypto growth potential in Singapore

The cryptocurrency market in Singapore is still relatively small. For example, Chia noted, the combined peak daily trading volumes for Singapore’s three major cryptocurrencies are only 2% of what it trades in securities each day.

“Cryptocurrencies represent less than 0.01% of fund assets managed by MAS regulated fund managers,” Chia added.

The growth potential in this market is part of what has drawn crypto companies to the Asian financial hub, they said.

Gemini, a US-based cryptocurrency launched by Tyler and Cameron Winklevoss, told Insider it is aggressively recruiting in its Singapore office.

“Gemini recognizes that Southeast Asia is an important part of the crypto movement,” its Asia-Pacific chief executive Jeremy Ng said in an email. He added that Gemini planned to stay in Singapore for the long term.

In 2019, Chinese billionaire crypto co-founder Jihan Wu also created a fintech platform called Matrixport in the city-state. Matrixport CEO John Ge told Insider Singapore that he has provided an “enabling environment” to foster innovations in fintech and crypto.

Singapore’s sovereign wealth fund, GIC, has spent hundreds of millions of dollars on crypto-related investments. This includes a $ 70 million stake in financial technology firm BC Group, the parent company of crypto exchange OSL, which also opened an office in Singapore in 2019.

Matt Long, head of distribution and premiums at OSL, told Insider: “If you look at the environment as it relates to regulation, as it relates to financial markets, and within this fintech and this blockchain, the growth of wealth and asset management, all the positive things that MAS has done, I think the question is why don’t we move to Singapore? “

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