(Bloomberg) -- Just days after saying Singapore is “brutal and unrelentingly hard” on bad behavior in the crypto industry, Sopnendu Mohanty, chief fintech officer at the city’s regulator, struck a cordial tone.
Mohanty, in a LinkedIn post summarizing his thoughts from the Point Zero Forum in Switzerland, commended the leadership of some of the biggest firms in the sector.
“Leaders from the Crypto/Token space (Binance, Crypto.com, Ripple and others) are fully committed to building a secure and sustainable innovation solving real problems, and identifying real-economy opportunities,” said Mohanty of the Monetary Authority of Singapore. “It is heartening to see the clarity among CEOs on the need to create a responsible and compliant industry. The future is on the right path.”
Mohanty’s praise comes as the digital currency market continues to spiral downward following a broad-based selloff in digital assets and the collapse of high-profile tokens TerraUSD and Luna. Major lenders Celsius Network and Babel Finance have frozen withdrawals, and Three Arrows Capital, a major crypto hedge fund, is facing liquidity troubles that rattled investors.
The total market value of cryptocurrencies, which topped $3 trillion in November, has dropped to $991 billion, according to data from CoinGecko. Bitcoin has fallen precipitously from a high near $69,000 in November, trading Saturday around $21,000.
Singapore was an early proponent of blockchain technology and officials have expressed ambitions to be a global crypto hub, but the relationship with the industry soured amid issues including a slow regulatory process for license approvals and a ban on crypto advertising that surprised the sector.
Binance, the largest crypto exchange, had a strong presence in Singapore and Chief Executive Officer Changpeng “CZ” Zhao resided on the island before the firm largely decamped in recent months to Dubai. The company is currently the target of investigations by almost every major US financial regulator -- the Department of Justice, the Commodity Futures Trading Commission, the Internal Revenue Service, and the Securities and Exchange Commission -- and others around the world.
The MAS may be picking up the pace on licenses, at least, with three in-principle approvals issued recently including to digital currency exchange Crypto.com.
Ripple -- engaged in a tussle with US regulators about the XRP token but which has a sizable international footprint -- and Binance have said they plan to expand even as other entities in the sector downsize. Crypto.com, which is headquartered in Singapore, announced layoffs of about 260 staff, or 5% of its workforce earlier this month. Chief Executive Officer Kris Marszalek said the company made the “difficult and necessary decisions” to optimize for profitability and sustainable growth during a market downturn.
“While others may have hit the brakes on hiring, we’re doubling down,” said Brooks Entwistle, Ripple’s managing director for APAC and MENA, in a recent email interview. “In the next 12 months, we’re leaning into our first mover advantage and taking opportunities to be more aggressive in our hiring, growth, investments and strategic opportunities. Just this year alone, we’re looking to hire 300 employees, nearly half of which will be based outside the US.”
Still, Mohanty’s post wasn’t entirely effusive, offering some of the caution that has also been a signature of Singapore’s approach to crypto.
“Web 3.0/Crypto is a very nascent industry, but the promises have run ahead of the technology maturity, the industry is filled with speculators and scammers, and magical soundbites with clickbait headlines are filling the space,” Mohanty said. “So let’s not create a forced error and throw the baby out with the bathwater.”
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
