here was a time when it seemed as though Singapore would become a global centre for cryptocurrency.
Authorities had signalled an early interest in harnessing blockchain technology. That, coupled with the city state’s favourable business environment, attracted digital asset companies and a burgeoning community of investors.
In 2021, investment in the industry in Singapore increased tenfold compared to the previous year to $1.48bn (£1.2bn), according to KPMG, making up nearly half the Asia Pacific total for the year.
2022 could not have been more different.
Crypto assets and companies – many with links to Singapore – have imploded, causing reverberations and sparking losses around the world.
First a popular token called Terra Luna collapsed, causing its sister token TerraUSD, which was largely stable, to plummet.
A few months later, Singapore-based crypto hedge fund Three Arrows filed for bankruptcy, taking down crypto exchange Voyager Digital with it. In August, crypto lender Hodlnaut became the next in a growing string of casualties.
It is thought that the closures of key market players this year has wiped out $1.5 trillion in crypto market capitalisation.
Then in November, billions were lost within a matter of days, when US crypto exchange FTX spectacularly collapsed because of a crippling liquidity crunch. FTX founder Sam Bankman-Fried has since been charged by US authorities with “one of the biggest financial frauds in US history”.
For Singapore, the FTX collapse was particularly shocking. Its state investment fund Temasek had invested in the exchange, pumping in $275m over several months.
Temasek says it will write down the money, and is conducting an internal review into the investment.
The fund is worth more than $295bn and so the FTX investment makes up a small percentage of its public wealth portfolio.
But Singapore’s deputy prime minister, who is also finance minister, told parliament the loss had caused reputational damage.
“The fact that other leading global institutional investors like BlackRock and Sequoia Capital also invested in FTX does not mitigate this,”
Tail investors were hurt too, and many believe the Singaporean authorities should have done more.
Nicole Yap, 26, says she didn’t flinch about investing in the exchange because so many big companies were backing it. She has lost roughly $150,000 (£122,000), but feels the onus should not be on the user entirely.
“You need the regulation – the government or the Securities and Exchange Commission (SEC) – to say, ‘these companies are good, we’ve seen their books,'” Ms Yap says.
“Just because there is a lot of scam in crypto, doesn’t mean crypto is a scam. But users don’t have a platform to find out about these things. We only have social media and crypto influencers.”