Singapore's Financial Regulator Cracks Down on Crypto ATMs

When it comes to crypto, Singapore is an intriguing country. Over the years, the Southeast Asian country has earned a reputation for being overwhelmingly crypto-friendly. But regulators continue to jeopardize this reputation.

Singapore's Financial Regulator Cracks Down on Crypto ATMs

The latest in the creeping anti-crypto sentiment? Banning automated teller machines (ATMs) that dispense cryptocurrencies in the country.

Withdrawals Just Got Harder

In mid-January, reports confirmed that the Monetary Authority of Singapore (MAS) - Singapore's financial regulator - had decided to shut down all crypto ATMs on the island nation. Bloomberg reported that ATM operators across the country were forced to shut down operations to comply with a new MAS directive.

The move was met with shock - especially from many of the top Singapore ATM operators. Daenerys & Co. said they were stunned to hear the news, agreeing to cease operations and remove all ATMs. Deodi shared a similar sentiment while agreeing to comply with the MAS' new ruling.

It is surprising since Singapore has a name for supporting its native crypto market. In December, the fintech startup Coincub named Singapore the most crypto-friendly nation on Earth. The company said Singapore's technological advancement and solid regulatory environment made it a perfect setting for cryptocurrencies to thrive.

Putting Tighter Clamps On The Industry

The move appears to be consistent with the MAS's desire to strengthen oversight in the crypto space. In November, Ravi Menon, the managing director of the MAS, told reporters that regulating Singapore's crypto space will be one of the agency's top priorities this year.

Menon said that despite rapid growth, the crypto market remains highly speculative, and there are still several threats facing the crypto space that need to be closely monitored. The MAS feels that only those crypto companies that meet strict requirements should be allowed to operate in the city-state.

The agency has already begun aggressively policing the crypto space. Besides the ATM ban, it released new guidelines restricting crypto companies from advertising their services in public spaces.

In guidelines released in January, the MAS warned the public that cryptocurrencies remain a high risk and to invest with caution. As part of its goal to ensure responsible investing, the agency has prohibited crypt firms from advertising on public transportation systems, social media platforms, websites, and print and broadcast media.

"MAS stresses that DPT service providers should conduct themselves with the understanding that trading of DPTs is not suitable for the general public. These Guidelines set out MAS' expectation that DPT service providers should not promote their DPT services to the general public in Singapore," the MAS pointed out in its statement.

The new advertising guidelines will apply to all registered crypto service providers in Singapore and companies in the transitory phase. Many across the industry agree that curbing advertising will restrict companies' ability to grow and connect with their customers and that this could backfire on Singapore's budding crypto industry.

Singapore's Crypto Space Still Booming?

Despite the MAS's hard stance, investment in Singapore's crypto space continues to grow. A new report from auditing giant KPMG shows that Singapore saw a tenfold increase in crypto investments in 2021, with the numbers jumping from $110 million to $1.48 billion.

In its report, KPMG said these numbers were on the rise thanks to government efforts to grow Singapore's capital market. Policies have positioned Singapore as an ideal location for fast-growing companies to list and base their operations. Many of these companies are crypto-based, and if things continue at this rate, Singapore could truly become a global crypto hub.

Even better, traditional financial institutions in Singapore remain committed to growing the country's crypto space. Last week, DSB Bank - the largest bank in Singapore - confirmed it would expand its crypto exchange to reach out to retail and institutional clients.

At the bank's Q4 earnings call, CEO Piyush Gupta said they plan to expand significantly this year, rolling out their digital asset trading features to retail investors. By expanding their investor base, they hope to grow their business and improve digital asset adoption.

Right now, all eyes are on how these new restrictions will affect crypto companies in Singapore - and the country's overall crypto landscape.

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