Singapore’s financial regulator has suspended a prominent digital currency exchange at the centre of a row involving a crypto pension scheme claiming links to South Korea’s biggest boy band BTS.
Singapore’s move to suspend the local operations of Bitget, a shirt sponsor of Italian football team Juventus, comes as the city-state seeks to establish itself as a global cryptocurrency hub.
Bitget in October was threatened with legal action by BTS’s agency Hybe 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 had advertised Army Coin as a way to provide lifetime financial support to BTS members “so they do not have to worry about surviving but instead let them do what they desire to do”. Hybe said the coin has no connection with BTS.
The episode demonstrates the challenges confronting regulators trying to keep the crypto industry in check as digital currencies gain wider acceptance among retail investors.
Singapore, a free-trading entrepôt and financial hub, has been more open to the technology than regional rivals including Hong Kong and Tokyo.
Popular cryptocurrency companies Binance, Ripple and Coinbase have applied for licences and been granted exemptions by the Monetary Authority of Singapore to serve both retail and institutional clients.
Bitget had also received an exemption but this 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 Bitget’s exemption removal.
However, Bitget’s services were still available in Singapore until late November when it was promoting Army Coin and its website continued to claim that it had MAS approval.
The company has since removed the MAS logo from its site after being contacted by the Financial Times and has blocked Singapore users from accessing its app and website. Bitget still claims to have licences in the US, Canada and Australia.
Bitget did not respond to queries from the FT on why its services had been still available to Singaporean residents even after having its exemption 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 good of BTS”, and will “truly support them financially”.
Hybe issued a statement in October that said 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 the coin fluctuated by up to 78 times its value in a day, rising back and forth 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 hell-bent on spending money on these exchanges, regulators cannot stop them,” said Mittal.
Crypto companies have stepped up their advertising efforts to capitalise on growing investor interest. Singapore-based cryptocurrency platform Crypto.com paid more than $700m in November for naming rights to the Staples Center, a Los Angeles stadium.
Bitget announced its sponsorship deal with Juventus in September. The exchange’s name and logo appears on the team’s black-and-white shirts as the club’s first-ever “sleeve sponsor”.