There 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," Lawrence Wong said.
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."
People saying I should move:

I think there’s still hope.

Hope @MAS_sg recognizes the opportunity for Singapore to become a hub for the future of finance.
Carol Lim started investing in cryptocurrency during the pandemic. The 52-year-old was hoping to make enough money to retire in the next few years.
"I invested with Hodlenaut because the Monetary Authority of Singapore (MAS) endorsed it. In today's value, I lost about $55,000. I can only hope to get some of it back."
Hodlenaut was one of a handful of firms that was granted in-principle approval to provide digital payment services by Singapore's central bank. The licence approval was rescinded when the lender was forced to stop withdrawals because of market conditions.
"The core of the problem is that there is some misunderstanding amongst regulators. They want to attract businesses to their jurisdiction, but you need to regulate in such a way that consumers are safe," says Michael Gronager, CEO and co-founder of blockchain analysis firm Chainalysis.
Mr Gronager says that because consumers are so global these days, regulators need to decide whether to implement laws on the company – for example, giving them a licence to operate in the country – or to restrict trading access to retail investors.
FTX did not have a licence to operate in Singapore. However, MAS has said it is not possible to prevent local users from accessing overseas service providers.
"We will see fraud, fast money in the industry – that's no surprise. We see it in the internet, we see it in all sorts of traditional industries," Mr Gronager says.
Singapore had started introducing new measures even before the FTX saga, warning that the technology can be volatile and speculative. It banned crypto advertising earlier this year and is investigating a number of outlets present in the island nation.
Binance, the world's largest crypto exchange, left Singapore last year after it was put on an investor alert list for soliciting customers without the requisite licence, and offering Singapore dollar trades.
The crackdown has attracted criticism from industry players as a result, for instance from Brian Armstrong, co-founder and CEO of US-based crypto exchange platform Coinbase.
"Singapore wants to be a hub for Web3 (a vision of the next iteration of the internet that uses blockchains and cryptocurrencies), and then simultaneously says: 'Oh, we're not really going to allow retail trading or self-hosted wallets to be available," he said at the Singapore FinTech Festival in November.
"Those two things are incompatible in my mind," he added.
Singapore's government says it remains enthusiastic about crypto and still wants to become a virtual-asset hub, with a focus on the business and administrative side of blockchain technology.
It has vowed to contain risks, by proposing knowledge tests for retail investors before being allowed to trade, and has acknowledged this could mean retail-focused companies may move to other jurisdictions.
"Cryptocurrency platforms can collapse due to fraud, unsustainable business models, or excessive risk taking. FTX is not the first cryptocurrency platform to collapse, nor will it be the last," Mr Wong said.
"Those who trade in cryptocurrencies must be prepared to lose all their value. No amount of regulation can remove this risk."
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