Davos 2023: Cryptocurrency regulation needed to address money laundering, financial crimes, WEF told

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Tharman Shanmugaratnam (second from the left), chairman of the Monetary Authority of Singapore, speaks during a panel session at the World Economic Forum’s annual meeting in Davos, Switzerland, on Wednesday. Photo: Bloomberg

Chad Brayin London

Published: 7:57pm, 18 Jan 2023

Regulation is desperately needed in the cryptocurrency space to protect against money laundering and other financial crimes, similar to requirements placed on the traditional banking industry, according to a panel of regulators and bank CEOs at the World Economic Forum’s annual meeting.

However, watchdogs need to be careful not to legitimise “purely speculative” activity in their quest to rein in the industry hit by several high-profile failures, such as the collapse of cryptocurrency exchange FTX, said Tharman Shanmugaratnam, chairman of the Monetary Authority of Singapore.

“Some things are very clear, whether it’s cryptocurrency or traditional finance. You’ve got to regulate for things like money laundering,” Tharman said on a panel discussing banking in today’s uncertain environment in Davos, Switzerland.

“Beyond that, if you have to think about regulating cryptocurrency, the same way we regulate banks, insurance companies for prudential reasons, for financial stability reasons, I think we have to take a step back and ask the basic philosophical question: does that legitimise something that is inherently purely speculative and, in fact, slightly crazy?

“Or are we better off providing ultra clarity to what’s an unregulated market and if you go in, you go in with your own risk? I lean more to the latter view.”

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FTX, one of the world’s highest profile cryptocurrency exchanges, collapsed into bankruptcy in November and its founder Sam Bankman-Fried is facing criminal fraud charges in the United States.