Singapore’s financial regulator has suspended a prominent digital currency exchange in the middle of a row involving a crypto-pension scheme claiming links with South Korea’s largest boy group BTS.
Singapore’s move to suspend the local operations of Bitget, a shirt sponsor of Italian football team Juventus, comes as the city-state wants to establish itself as a global cryptocurrency.
Bitget was threatened with legal action by BTS’s agency Hybe in October over the promotion of digital currency Army Coin, named after the group’s enthusiastic followers BTS ARMY. The owner and creator of the coin is unknown.
The platform advertised Army Coin as a way to provide lifelong financial support to BTS members “so that they do not have to worry about survival, but rather let them do what they want to do”. Hybe said the coin has nothing to do with BTS.
The episode demonstrates the challenges facing regulators trying to keep the crypto industry in check as digital currencies gain wider acceptance among retail investors.
Last week Spain’s market regulator soccer player Andrés Iniesta criticized about a social media post promoting Binance, the world’s largest crypto exchange.
Singapore, a free trade warehouse and financial hub, was more open to technology as local competitors, including Hong Kong and Tokyo.
Popular cryptocurrency companies Binance, Ripple and Coinbase have applied for licenses and have been granted exemptions by the Monetary Authority of Singapore to serve both retail and institutional clients.
Bitget also received an exemption, but it was removed in July, according to a person familiar with the matter. Both Bitget and the MAS declined to provide details on the reasons for removing Bitget’s release.
However, Bitget’s services were still available in Singapore until the end of November when it promoted Army Coin and its website went on to claim that it had MAS approval.
The company has since removed the MAS logo from its website after being contacted by the Financial Times and has blocked Singapore users from accessing its application and website. Bitget still claims to have licenses in the US, Canada and Australia.
Bitget did not respond to inquiries from the FT as to why its services were still available to residents of Singapore, even after its release was taken away.
Meanwhile, Army Coin has also since been listed on CoinTiger, another cryptocurrency exchange with ties to Singapore. CoinTiger’s announcement said the coin “exists for the benefit of BTS”, and will “truly support them financially”.
Hybe issued a statement in October saying the coin had “no connection” with BTS and warned that it would also “take legal action”, but declined to comment on the Army Coin creator.
The coin remains available for users to buy and sell in other jurisdictions on Bitget, including in South Korea, although trading has been extremely volatile.
An FT analysis found that the coin fluctuates by up to 78 times its value in a day and rises between $ 1,000 and $ 78,000 within minutes.
The difficulty for Singapore regulators, as with any jurisdiction, was that they could not stop people from buying risky assets, said Varun Mittal, author of Singapore: The Fintech Nation.
“If someone is determined to spend money on these exchanges, regulators can not stop them,” Mittal said.
Cryptocompanies have bolstered their advertising efforts to capitalize on growing investor interest. Singapore-based cryptocurrency platform Crypto.com paid more than $ 700m in November naming rights for the Staples Center, a Los Angeles stadium.
Bitget announced its sponsorship deal with Juventus in September. The scholarship’s name and logo appear on the team’s black and white shirts as the club’s first “sleeve sponsor” ever.
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