Cryptocurrencies are not for kids, says Singapore for the 1,000th time

In this week’s Token Issue, we break down Monetary Authority of Singapore's latest announcement to understand what the regulators really mean. [Read from your browser]( Token Issue Welcome to Token Issue! Delivered every Friday, this free newsletter breaks down the biggest stories in Asia’s crypto scene and beyond. View past issues [here]( or [sign up here]( to receive future newsletters. Written by Shihan Fang Crypto journalist Hi {NAME} On Monday, Ravi Menon, the managing director at the Monetary Authority of Singapore (MAS), opened his speech with a caveat: He won’t be revealing anything new. There would be no new insights, just an old trope about MAS’ stance on cryptocurrencies. And what an old trope it turned out to be. MAS wants to promote blockchain innovation but wants to protect the everyday person from cryptocurrency speculation. More specifically, the regulator is totally happy to encourage financial enterprises to experiment with and deploy blockchain for business - be it for wholesale banking, trade finance, cross-border payments, and so forth. What’s not OK is for retail investors to speculate their savings on cryptocurrency tokens in the hopes of becoming the next Crazy Rich Asian. (The exact phrase Menon used to describe cryptocurrencies was “highly hazardous for retail investors.”) Most media focused on the potential regulatory tightening for retail investors, but this misses the point since protecting them is merely one out of the five risks of the digital asset industry that Menon covered in his speech. (The link to the full speech is in the next section of this newsletter.) The truth of the matter is that Singapore is and will always be operating amid a sea of conundrums. To understand the government’s implicit stance on cryptocurrencies, look no further than the casinos at Resorts World Sentosa and Marina Bay Sands, which run alongside the myriad illegal gambling dens that [make local headlines every now and then](. Locals - that is, Singaporeans and Singapore permanent residents - are discouraged from entering those swanky casinos with a hefty S$150 entry fee. Anti-gambling messaging is also prevalent throughout the city-state through public advertisements in out-of-home displays, cinemas, and even not-so-subtle programming in dramas on local TV. Everyone is perfectly aware of the tragic consequences of gambling addiction. Basically, gambling is permitted in Singapore but is strictly ring-fenced. When it comes to cryptocurrencies, it has never been easier for anyone to access the market through exchanges such as Crypto.com, which began operations without a digital payment token (DPT) license and now has in-principle approval. However, MAS has consistently issued stern warnings against cryptocurrency speculation and limiting public advertising of cryptocurrency services. It’s also been painfully difficult for any cryptocurrency company to get a full DPT license, which effectively means that most of them are operating in a regulatory gray area. Reading between the lines, what MAS actually means is this: We don’t like cryptocurrency speculation, but we’re not going to stop it completely. And if things get out of hand, we reserve the right to pull the plug. There’s a local saying that encapsulates the difference between what is said and what is ultimately done. “By right,” there are the rules, and then there’s “by left”: Do it at your own risk. -- Shihan  ---------------------------------------------------------------  ON THE SOAPBOX "[Yes to digital asset innovation, no to cryptocurrency speculation]( - opening address by Ravi Menon, managing director of the Monetary Authority of Singapore, at the Green Shoots Seminar on August 29, 2022 Menon’s speech reiterated MAS’ official stance on blockchain, digital assets, and cryptocurrencies. On page seven in the document, he highlights five risks that MAS is focusing on. They are: - Combatting money laundering and terrorist financing risks - Managing technology and cyber-related risks - Safeguarding against harm to retail investors - Upholding the promise of stability in stablecoins - Mitigating potential financial stability risks If you’re still confused about Singapore’s cryptocurrency policy, read the full speech. Then re-read our commentary on that speech in the previous section.  --------------------------------------------------------------- ⭐ TO THE STARS A look at what’s pushing Web3 forward. [GoTo Group snaps up Indonesian crypto exchange Kripto Maksima Koin for $8.4m]( The Indonesian tech major has been trying to enter the cryptocurrency sector for some time now. It acquired Philippine-based Coins.ph in 2019 for around US$95 million and [reportedly]( sold the startup to former Binance CFO Wei Zhou for double the amount earlier this year. The deal was executed through GoTo’s e-wallet subsidiary, indicating some probability of crypto integration in the group’s wallet business in the near future. Kripto Maksima Koin is one of 25 crypto exchanges that hold a license to operate under Indonesia’s Commodity Futures Trading Regulatory Agency (Bappebti). Bappebti stopped issuing new licenses earlier this month, which has turned existing license holders into acquisition targets for new players that want to open crypto exchanges in the country. This means that GoTo’s sale of Coins.ph wasn’t a sign that it was abandoning crypto. Instead, it points to a doubling down on Indonesia, its largest market. The move also puts the company in stark contrast with regional rival Grab, which has not made any major moves into the crypto space.  Ethereum Merge to be completed between September 10 to September 20 Save the date. [Ethereum Foundation developers have announced]( that the upgrade of the Ethereum blockchain from a proof-of-work consensus mechanism to a proof-of-stake (PoS) blockchain will be completed by the middle of next month. With more than half of all decentralized finance (DeFi) projects built on Ethereum, the event, known as “The Merge,” is proving to be a momentous one, akin to [switching airplane engines on a fully boarded plane in mid-flight](. Not everyone’s happy with it. [One pundit on the Motley Fool]( says that the announcement may have caused Nvidia to miss its revenue targets. The semiconductor manufacturer makes graphics chips used by cryptocurrency miners and video game developers. With the move to a PoS mechanism, most of these graphics chips will no longer be in use and may be dumped into the second-hand chip market.  --------------------------------------------------------------- 🌙 TO THE MOON Tokens, NFTs, and yield generators we’re noticing. [Friktion Labs]( The Austin-based company behind Friktion, a DeFi portfolio and risk management platform built on Solana, is keeping hodlrs warm by sticking to its pre-winter promises. Friktion’s native structured products, called Volts, deliver between 23% to 31% annual percentage yield (APY) numbers, which may come as a surprise given the number of DeFi platforms that have since collapsed due to their inability to keep up with similar figures. Friktion Labs says it achieves these returns for depositors by selling a variety of [options and futures]( contracts to investors and collecting premiums on them. The company raised US$5.5 million earlier this year and announced a partnership with Fireblocks, a digital asset custody platform, this week. It claims to have over 17,000 users, 1,300 institutional clients, trading volumes of more than US$2.5 billion, and about US$50 million in [total value locked](. [DigiDaigaku NFT collection]( The parent company behind the DigiDaigaku NFT collection, [Limit Break]( raised US$200 million this week to develop a free-to-own NFT game. This means that rather than having gamers buy non-fungible tokens prior to playing the game, Limit Break will give the first round of NFTs away for free. It looks like a win-win situation for all. If the game takes off, the floor price of the tokens are bound to increase, giving both gamers and Limit Break the option of letting go of their NFTs for a profit. If the game doesn’t take off, well, too bad. The floor price of the DigiDaigaku NFTs have increased more than 200% in a week, according to data from NFTGo.  --------------------------------------------------------------- 🌏 BACK TO EARTH The week’s biggest roadblocks. 1️⃣ [Hodlnaut granted creditor protection by Singapore Court]( The cryptocurrency lender has been placed under interim judicial management by the Singapore High Court. Judicial management allows a company under financial distress to be restructured under court supervision. The court has appointed corporate restructuring advisors from global accounting firm Ernst & Young as interim judicial managers. 2️⃣ [Avalanche takes a tumble after Crypto Leaks]( Emin Gun Sirer, the CEO of Ava Labs (the company behind the Avalanche blockchain), and lawyer Kyle Roche were accused of launching lawsuits against competitors of Avalanche such as Solana Labs and Binance. The accusations were published in what appears to be a hastily set up website named [Crypto Leaks]( and was accompanied by numerous videos of Roche admitting that he was working with Sirer to use litigation as a tool to harm Ava Labs’ competitors. The website also states that Ripple CEO Brad Garlinghouse may have been an angel investor at Roche’s law firm. [Garlinghouse has since denied any association with Roche]( while [Sirer says]( that the lawyer has only represented Ava Labs in a couple of run-of-the-mill corporate contract disputes and one personal libel case.  --------------------------------------------------------------- STILL A PONZI SCHEME The dark underbelly of Web3 and crypto today "Are you ready to be rich the easy way?” — Pokemonfi Alliance (@pokemonfi_) [March 30, 2022]( Another day, another rug pull. This time, fraudsters made off with US$708,000 in earnings after cashing out their tokens (PMC and PMF) from the PokemonFi game project. Like other rug pulls, all the investors ever received for their money was the video trailer in the tweet above, an average dose of #FOMO, and now, an incredibly bitter aftertaste. [#CommunityAlert]( We are seeing a [#rug]( on [@PMFi_Official]( which has dropped >99%. The 2 tokens associated are [$PMC]( and [$PMF]( & went straight to zero. They are both linked to the deployer's wallet. So far, the total amount of the rug is ~$708,000 USD Bsc:0x0aa5 Stay vigilant! — CertiK Alert (@CertiKAlert) [August 24, 2022]( --------------------------------------------------------------- MORE TO CHEW ON Essential news and views. 1️⃣ [Temasek to lead $100m round of Animoca Brands]( The Singapore investment company is looking to lead a US$100 million investment round for Hong Kong-based metaverse giant Animoca Brands, according to people familiar with the situation. Temasek is looking to finance the round via convertible bonds. Animoca is currently valued at about US$5 billion. 2️⃣ [Eminem and Snoop Dogg perform as Bored Apes at MTV awards show]( The hip-hop superstars and Bored Ape Yacht Club NFT owners performed their latest collaboration, “From the D 2 the LBC,” as their avatars last weekend. It’s probably best if you watch it yourself [here](. While Bored Ape evangelists lauded the performance for integrating metaverse aspects into a live event, Eminem fans weren’t impressed. 3️⃣ [Who’s holding 50% of Axie Infinity’s SLP supply?]( CoinTelegraph uncovered a mysterious wallet that has been amassing more than half of the circulating supply of Smooth Love Potions (SLP), the in-game currency of Axie Infinity. Axie Infinity, its developer Sky Mavis, and Yield Guild Games don’t own the wallet. Drop us a note if you know who it is. 4️⃣ [Crypto.com sues woman after accidentally sending her $7m]( Manivel Gangadory, a woman in Melbourne, asked for a US$70 refund from the crypto exchange but received US$7 million instead. She then bought a five-bedroom house for her sister before the mistake was discovered by Crypto.com during an audit. She’s now being asked by Victoria’s Supreme Court to sell the house and return the money to Crypto.com. 5️⃣ [Reddit co-founder to raise $177.6m for crypto fund]( Seven Seven Six, a venture capital firm led by Alexis Ohanian, will target tokens that are available at a discount. The crypto fund, dubbed Kryptos, will reportedly charge investors a 2.5% management fee and a 25% to 35% share of the fund’s profits if the fund returns 5x or more in capital.  --------------------------------------------------------------- That’s all for this issue - we hope you liked it. WAGMI! P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2022 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894