Asia AM Brief: Did 3AC and Terraform’s Collapse Spark Singapore’s Crackdown on Offshore Crypto Entities?

Market Shaken by Israel-Iran Tensions, MAS Clamps Down on Offshore Crypto Firms, and Ethereum Outperforms Bitcoin Amid Altcoin Optimism

As Asia’s trading session kicks off, risk sentiment remains fragile after Israel confirmed precision airstrikes on Iranian nuclear facilities early Friday Hong Kong time. While U.S. equities held up overnight, the crypto market wasn’t as resilient — bitcoin (BTC) plunged to $103,162, and ether (ETH) dropped below $2,700, deepening declines across major altcoins.

Despite near-term volatility, ETH remains up nearly 40% over the past three months, outperforming both bitcoin and the CoinDesk 20 Index, according to CoinMarketCap. Analysts suggest Ethereum’s relative strength could reflect a broader shift in investor appetite toward altcoins with real utility and narrative strength.

“Ethereum is acting as a bellwether for the altcoin cycle,” said Charmaine Tam, Head of OTC at Hex Trust. “Rising ETH dominance, persistent ETF inflows, and growth in Layer 2 activity show that capital is rotating beyond just bitcoin.”

ETH as a Proxy for Risk Appetite

Ethereum’s dominance has climbed from 7% to nearly 10%, coinciding with a modest decline in BTC’s market share. According to Tam, this reflects investor interest in sectors like DeFi, modular blockchains, and AI-integrated protocols. Projects like Pendle, Bittensor, and Hyperliquid are seeing notable on-chain inflows, further validating the trend.

ETH-based spot ETFs continue to attract institutional capital, with over $1.25 billion in inflows since mid-May and $240 million added on June 11 alone. As long as this momentum continues, Ethereum could continue leading capital flows into high-conviction altcoins.

MAS Ends Regulatory Arbitrage for Offshore Crypto Firms

In a long-anticipated regulatory shift, Singapore’s Monetary Authority (MAS) has finalized rules requiring crypto firms serving only foreign clients to register and operate under its direct oversight. The new licensing regime, set to take effect June 30, is forcing firms like Bitget, Bybit, and WazirX to exit Singapore operations.

While this marks a turning point, it’s been years in the making. The crackdown stems from lessons learned during the collapse of Three Arrows Capital (3AC) and Terraform Labs, both of which were technically domiciled in Singapore but operated with minimal local oversight. Their high-profile failures damaged Singapore’s global reputation while exposing regulatory blind spots.

MAS’s new stance leaves no room for “shell” operations. Companies seeking to benefit from Singapore’s regulatory credibility must now operate transparently and under direct supervision — signaling the end of crypto regulatory arbitrage in the city-state.

Quantum-Ready Security: Quranium Launches QSafe Wallet

Quranium, a quantum-secure blockchain project, has launched QSafe, a crypto wallet built to withstand the threat of quantum computing. Leveraging post-quantum algorithms ML-KEM and SLHDSA, both recognized by NIST, QSafe supports Bitcoin, Solana, Ethereum-compatible chains, and Quranium’s native token.

“We built QSafe not just to react to quantum threats, but to stay ahead of them,” said co-founder Priya Dhiman.

With quantum hardware advancing faster than expected, QSafe aims to offer future-proof security in a space still largely reliant on vulnerable legacy cryptography like ECDSA and SHA-256.

Market Snapshot (as of 8:30 HKT)

Bitcoin (BTC): Down 4.7%, trading near $103,300 amid Israel-Iran tensions and a risk-off shift.
Ethereum (ETH): Down 2.9% to $2,694 after repeated rejections near $2,770; inflows to ETH ETFs remain strong.
Gold: Surged 3.2% to $3,426.95, benefiting from geopolitical risk and soft U.S. data.
Nikkei 225: Dropped 1.28% after Israeli strikes, mirroring weakness across Asia-Pacific markets.
S&P 500: Gained 0.38% to 6,045.26, led by tech after Oracle’s earnings surprise boosted sentiment.