Singapore's crypto ambitions dashed by three arrows


 Crypto players in Southeast Asia’s financial hub are bracing for more bankruptcies and lawsuits. Regulators expected to become less lenient at the Monetary Authority of Singapore (MAS), whose welcoming attitude has helped attract companies from China, India and elsewhere. The collapse of crypto fund Three Arrows Capital, a global digital currency slump, was a high profile victim.


Investment in Singapore-based crypto and blockchain companies will grow to $1.48 billion in 2021, a 10-fold increase from the previous year. It will account for almost half of the total investment in the Asia-Pacific region in 2021. MAS regulators say they want to promote crypto-related services.


Three Arrows Capital (3AC) began liquidation proceedings in the British Virgin Islands on June 27. 3AC did not respond to a request for comment, and its liquidators told a U.S. bankruptcy court they were unable to locate the fund’s founders, Kyle Davis and Zhu Su.


The fallout from 3AC's collapse -- and the market turmoil that followed -- was swift and severe. Singapore-based crypto lending and trading platform Vault said last week it would suspend payments. In the U.S., cryptocurrency lender Voyager Digital filed for bankruptcy last week, days after 3AC defaulted on a $650 million cryptocurrency loan.


Rose Kehoe, CEO of Kroll’s restructuring operations in Singapore, said she expects crypto-related companies facing liquidity issues to take advantage of Singapore's corporate restructuring mechanism. 'We will continue to see global crypto markets affected by the contagion effect of recent market events, including in Singapore,' she said. Industry insiders are also wary of the Singapore regulator's response.


MAS did not comment on the matter, but on June 30, 3AC issued a rare public condemnation of a breach of the fund's rules. It added that the company was under investigation for possible further breaches. 'I think (MAS) wants to send a signal to the industry that '3AC is already on our watch list',\' said Hagen Rooke, a partner at law firm Reed Smith.


MAS did not comment on the matter, but on June 30, 3AC issued a rare public condemnation of a breach of the fund's rules. The company was under investigation for possible further breaches. 'I think (MAS) wants to send a signal to the industry that '3AC is already on our watch list',\' said Hagen Rooke, a partner at law firm Reed Smith in Singapore.


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