Singapore Tightens Regulatory Grip on Crypto

Singapore Tightens Regulatory Grip on Crypto

Singapore has long been praised for being a forward-thinking, progressive jurisdiction that supports technology and innovation. This has enticed a horde of cryptocurrency and blockchain startups to set up shop in the nation, lured by its seemingly openness to the industry. However, these companies are now facing roadblocks and finding it rather challenging to operate in the city-state.

Just a couple of weeks ago, operators of crypto ATMs were forced to shut down their machines after the Monetary Authority of Singapore (MAS) outlawed cash-to-crypto terminals. The move is part of a wider crackdown on advertising cryptocurrencies to the general public, which MAS believes shouldn’t be encouraged to engage in the trading of digital assets.

New guidelines were issued on January 17, 2022 prohibiting cryptocurrency trading service providers from promoting their services to the general public, specifically calling out ATMs for providing such access and convenience that “may mislead the public to trade in digital payment tokens (DPTs) on impulse, without considering convenient access may mislead the public to trade in the risks of trading in DPTs.”

“DPT service providers should not provide physical ATMs in public areas in Singapore to facilitate public access to their DPT services,” the guidelines say.

Singapore’s Cryptocurrency Industry

Crypto service providers may promote their services on their own corporate website, mobile applications or official social media accounts but mustn’t trivialize the risks of trading digital assets, the document reads.

These companies shouldn’t promote their DPT services in public areas in Singapore or through any other media directed at the general public in Singapore, and shouldn’t engage third parties to advertise their services, it says.

The move is the latest setback for Singapore’s crypto industry in which many are struggling to secure crypto exchange or DPT licenses.

So far, MAS has only granted three licenses out of around 170 companies that applied. Over a hundred have withdrawn their applications or been rejected and at least one has received “in-principle approval.”

Companies that were operating in the country prior to the introduction of the licensing regime were granted exemptions until the outcome of their application is known.

Crypto startups turn to Dubai

Last year, Binance Asia Services, the Singapore entity of crypto exchange Binance, withdrew its application for a cryptocurrency exchange license in the city-state after spending a year trying to win regulators’ approval.

The company, which shut down its operations in Singapore earlier this month, has instead decided to move to Dubai after signing a deal with the Dubai World Trade Centre Authority (DWTCA) to build a new international virtual assets hub.

According to Anndy Lian, chairman of BigOne Exchange, a crypto exchange headquartered in the Netherlands, crypto companies started exiting the city-state six months ago, opting instead for locations such as Dubai and Europe to base their companies.

“The trend is obvious. Businesses are moving away,” Lian told Tech in Asia earlier this month. “Singapore is openly welcoming everybody, then openly rejecting almost everybody.”

The United Arab Emirates (UAE) has over 40 multidisciplinary free trade zones, among them the DWTCA. These areas have their own special tax, customs and import regimes, and are designed to attract foreign investment.

Several of the UAE’s free zones have been actively working towards establishing themselves into leading crypto and blockchain hubs, with some having already started issuing permits for virtual asset services providers.

So far, the Dubai Multi Commodities Centre (DMCC) has licensed 22, the Abu Dhabi Global Market has six, and the Dubai Silicon Oasis Authority has at least one, according to a government report seen by Bloomberg. Dubai International Financial Centre, meanwhile, has none for now.

JLT Free Zone

DMCC Free Zone

A blog post released on January 25, 2022 by crypto gaming company Quantum Works details how the DMCC has wooed the startup into moving to Dubai from the UK, highlighting the burgeoning crypto community there.

“DMCC has partnered with CV VC (Crypto-Valley Venture Capital) and CV Labs to launch the crypto center we now call home,” the company wrote.

“While most of the free world is spending time trying to figure out how to legislate crypto, … Dubai is ahead of the global curve when it comes to crypto taxes and legislation.

“There are over 20,000 companies in this blockchain network that we now have access to. Companies like Binance see the same opportunity here as us.”

At the federal level, the government is working on a crypto licensing regime which it hopes will help bring in some of the world’s biggest crypto companies, a government official told Bloomberg earlier this week.

The Securities and Commodities Authority is currently in the final stage of amending legislation to allow virtual asset services providers to set up. The first federal licenses are expected to be issued by the end of Q1 2022.

 

Original Source: https://fintechnews.sg/59341/blockchain/singapore-tightens-regulatory-grip-on-crypto/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Crypto Fundraising in 2022: More VC, Metaverse, Gaming, and Regulatory Questions

Crypto Fundraising in 2022: More VC, Metaverse, Gaming, and Regulatory Questions
  • Established VC firms are now realizing that crypto is the next great wave of tech.
  • Investors will be focused largely on projects operating within the metaverse, Web 3, DeFi, NFT, and gaming sub-sectors.
  • Current metaverse-related projects need to improve the social aspect of their platforms before attracting the really big bucks.
  • One important question remains: does the increasing involvement of VC funds in crypto make it likelier that the SEC will tend to view cryptoassets as securities?

 

The nascent crypto industry is very dependent on funding. Not just the funding we’ve seen in the form of various coin offerings and private fundraising, but also the indirect funding that occurs whenever retail traders buy a cryptoasset and boost its price, thereby increasing the value of funds held by blockchain platforms and their developers.

The past few years have witnessed an evolution in crypto funding, however, with the initial coin offering (ICO) wave of 2017 and 2019 gradually giving way to more traditional venture capital (VC). And as the US Securities and Exchange Commission (SEC) continues its legal battle with Ripple, it’s highly likely that this trend will only deepen in 2022.

According to industry figures speaking with Cryptonews.com, more traditional VC firms and investment funds will turn towards crypto and blockchain this year, further pushing public token offerings into the margins. And they’ll be focused largely on projects operating within the metaverseWeb 3, and gaming sub-sectors.

More VCs venture into crypto

2021 may have been a great year for crypto in terms of rising prices and market activity, but it was also a record-breaking year as far as more traditional venture capital funding was concerned.

Data compiled by PitchBook shows that, over the course of 2021, venture capital funds invested around USD 30bn in crypto- and blockchain-related firms. This is more than four times the previous record total set in 2018, and it’s also more than all other years combined.

This breakthrough amount has set a new precedent and created a new model for the industry, with the USD 30bn total also surpassing the record amount of money raised by ICOs in 2018 (which was between USD 11bn and USD 22bn, depending on who you ask). And given that the SEC is suing Ripple for allegedly conducting an unregistered securities offering, 2022 is likely to see more projects looking to VC funds for investment.

“Established VC firms are now realizing that crypto is the next great wave of tech, like the Internet itself and mobile beforehand. They must invest — they have no choice,” said Mark Jeffrey, General Partner at the Boolean Fund and Co-founder of Guardian Circle.

Jeffrey suggests that a VC firm missing out on the next Google or Amazon or Facebook would be catastrophic, not least when they already missed out on Ethereum (ETH)’s ICO, which will potentially prove to be one of the greatest investment opportunities in history.

“So 2022 will certainly see increased interest and investment at an accelerated pace,” he told Cryptonews.com.

Other figures and analysts working within the crypto sector agree that this year will bring an increase in traditional investment firms diving into crypto for the first time.

“Yes, we will see more traditional funds entering into the cryptoverse. Particularly I see that there will be more uptakes from family offices and sovereign wealth-related funds,” said Anndy Lian, the Chairman of the crypto exchange BigONE and the Chief Digital Advisor to the Mongolian Productivity Organization.

As a taster of the kind of entity we can expect to enter crypto fundraising this year, it’s worth remembering that none other than Japanese financial giant SoftBank invested in the Sandbox in early November. In fact, SoftBank also invested in Digital Currency Group around the same time, along with Alphabet (Google’s parent company) and the state-owned Singaporean fund GIC.

This is quite a wide range of different funding organizations, and it’s because a diverse pick of funds are getting involved in crypto that some analysts think, sooner or later, pretty much all major funds will have to be.

“In the mid-90’s, there were internet VCs. By 2000, virtually every VC was an internet VC. Crypto investing is on that same trajectory,” said Lou Kerner, the CEO of Blockchain Coinvestors Acq. Corp.

Targets: Metaverse, gaming, NFTs, Web 3, and DeFi

So assuming that more traditional investment funds and firms will get involved in raising money for crypto, what kinds of projects will they mostly be targeting?

“Metaverse is the hottest space at the moment, and that will likely extend through 2022 and beyond. But we’re still so early in crypto, that every area should see dramatic growth in investments, including gaming, layer 1 and layer 2 protocols, DeFi, and NFTs,” Kerner told Cryptonews.com.

The metaverse (whatever that will actually prove to be) is a theme mentioned by every commenter Cryptonews.com spoke with for the purposes of this article. This includes Mark Jeffrey, who despite suggesting that the metaverse will be the biggest target for funds in 2022, also argues that current metaverse-related projects need to improve the social aspect of their platforms before attracting the really big bucks.

“If you go into Decentraland, you see 500-1000 people — but none of them are talking to each other. They’re all wandering around, together, but alone, looking at scenery — and sure, buying land and avatar pieces — but that’s it,” he said.

Jeffrey predicts that such a model won’t sustain itself, unless it becomes more comprehensively social, with people able to spend hours interacting with each other online, as do on platforms such as Twitter and Facebook.

“But I do have hope that someone WILL crack the metaverse social medium, and one of these offerings will erupt. Once it does, NFT’s and crypto will create a massive opportunity for tens or hundreds of billions to be made,” he added.

Associated with the metaverse, gaming is likely to be another area that gets VC funds hot under the collar in 2022.

“The play-to-earn gaming sector also seems huge, as Axie Infinity has proven. Even though the gameplay is not great, it’s taken off in a big way,” said Jeffrey.

Another area that crops up, along with the metaverse, Web 3, gaming, and NFTs, is DeFi.

“The more specialized [funds] will go for specific verticals; if they are more into the finance sector, they will go for DeFi or investing in the next main chain if they are more tech-savvy,” predicted Anndy Lian.

The regulatory question

One important question remains: does the increasing involvement of VC funds in crypto make it likelier that the SEC will tend to view cryptoassets as securities? Because with funds buying the native tokens of platforms in the expectation that these platforms will grow (via the efforts of an enterprise) and, in turn, make said tokens more valuable, it really does seem as if the Howey test is being satisfied.

For Anndy Lian, this is a difficult question to answer, given that it depends on several variables.

“Personally, the increased number of investments into crypto does not necessarily mean that regulators will see the investments as securities. It depends on the nature of the project, where and how the VCs get them money from, and lastly where do they exercise their agreements,” he said.

For Mark Jeffrey, increased VC funding may incite the wrath of the SEC, although the latter is likely to come down hard on crypto anyway in 2022 and beyond.

“I do think the SEC will attack crypto in general and DeFi in particular in 2022. And [they] will have some success at curtailing activity in the US — but not worldwide,” he said, adding that crypto is growing too fast elsewhere in the world for American regulators to curb its growth too much.

Despite the fact that crypto can operate elsewhere than the US, the likely belligerence of the SEC and other American regulators may seem discouraging. However, Anndy Lian suggests the growing role of traditional VC funds may in fact soften the stance of the SEC and other regulators.

He said, “In fact, I would challenge that such an increase in investments would be good case studies and will act as a benchmarking tool for regulators to know how to further navigate in the crypto space, so as to find better solutions to protect the retail investors.”

 

 

Original Source: https://cryptonews.com/exclusives/crypto-fundraising-2022-more-vc-metaverse-gaming-regulatory-questions.htm

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Keynote speech by Anndy Lian: Understand DeFi to Build Regulatory Frameworks Around it

Keynote speech by Anndy Lian: Understand DeFi to Build Regulatory Frameworks Around it

Decentralized Finance (DeFi) is still in rapid growth. According to a report from CoinGecko, the industry has reached a $100 billion capitalization and over one million users. Global DeFi Investment Summit, 2-3 June 2021, Dubai brought experts globally together. Anndy Lian, Advisory Board Member to Hyundai DAC and also Chief Digital Advisor to Mongolian Productivity Organization gave a keynote presentation titled “Understand DeFi to Build Regulatory Frameworks Around it”.

Anndy walked the audiences through the challenges of DeFi tokens. “In 2019, we were all experimenting. Then in 2020, we wonder if DeFi tokens have real value. But in 2021 onwards, we should look closely at them if they can survive the bear plunges, then survive the financial crisis and then a global crisis. This is a real test. This test is not for DeFi, it is for NFT, IDOs and the whole cryptocurrency space.”

Lian highlighted that the decentralized governance of DeFi services poses operational challenges and if often not well understood in the exposures in financial risks and compliance issues. DeFi’s landscape is ever-changing and it is tough for the traditional finance industry to keep up. The governments are also playing catch up.

“Regulators understand that it is hard to regulate DeFi DAPPS built on a fully public and decentralised blockchain and they do not trust “code is law” thesis, wherein law represents a set of rules that are written and enforced through immutable code as there are possibilities of errors and frauds. I have suggested to the governments to encourage participants in the DeFi Industry to have co-operative models to assume governance and liability of operating the platform. This also provides some guidance and protection to DeFi application users or investors. This is maybe an unpopular opinion to some but this could be one way to co-exist.” Anndy Lian said.

At the end of the keynote speech, he urges the regulators to take this time to shape expectations by working with the right parties, while taking enforcement action against bad actors.

Global DeFi Investment Summit is a 2-day Program being curated based on guidelines from industry experts, with a target of about 200+ delegates. The goal of this event is to connect global investors and DeFi experts in this space including emerging start-ups – with regional business and leaders from across key industry verticals. This event has also featured other keynote speakers like Justin Sun, Founder at TRON and Tim Draper, Founder at Draper Associates & DFJ.

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Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j