Cody McGrath 
To prepare for new crypto rules that address the ongoing liquidity crisis and withdrawal concerns, the Monetary Authority of Singapore (MAS) has begun an examination of crypto firms.
According to Bloomberg on Friday, certain applicants and license holders for the MAS’ Digital Payment Token have received lengthy questionnaires from the central bank of Singapore.
The questionnaires, which were distributed over the past month, purportedly sought “very granular information” regarding the operations and assets of the inspected crypto businesses.
The focus of the inspections was on the financial health and connectivity of the companies, and the top tokens owned, top lending and borrowing counterparties, quantity lent, and top tokens staked via decentralized finance protocols were among the topics covered.
The report states that companies were expected to respond quickly and cites persons with knowledge of the situation.
The MAS has so far granted 10 licenses to cryptocurrency businesses in Singapore, including exchanges like Crypto.com and the brokerage division of DBS Bank called DBS Vickers. Out of the almost 200 known firms that have sought for the license, that is a very small portion.
The most recent regulatory measure in Singapore appears to be intended to increase oversight of cryptocurrency companies in light of impending new laws for the sector.
The financial watchdog is developing a regulatory framework to cover “consumer protection, market behavior, and reserve backing for stablecoins” in the upcoming few months, according to MAS managing director Ravi Menon’s announcement in mid-July.
The MAS particularly referred to gaps in Singapore’s current crypto legislation, saying that companies that provide services for digital payment tokens are not subject to risk-based capital or liquidity requirements.
Additionally, they are not currently required to protect client funds or digital tokens from bankruptcy risks. Instead, legislation primarily focuses on technological hazards, money laundering, and terrorism financing threats.
The impending implementation of a new regulatory framework for cryptocurrencies in Singapore is a reaction to the continuing liquidity crisis and the related withdrawal problems during a bear market.
After failing to make margin calls in mid-June, Three Arrows Capital (3AC), a distressed Singaporean cryptocurrency hedge firm, filed for bankruptcy during this crypto winter.
Su Zhu, a co-founder of 3AC, stated in an affidavit in the middle of August that the business changed its registration from Singapore to the British Virgin Islands in September 2021. He allegedly charged the liquidators with deceiving authorities over the organizational structure of 3AC.