The Monetary Authority of Singapore (MAS) has issued a statement addressing the bankruptcy of FTX, saying it would like to address some questions and “misconceptions.”
Singapore is recognized as the top Fintech hub in Asia and is generally viewed as digital asset friendly. That being said, Singapore authorities have been warning the public about the risk of crypto trading for quite some time.
MAS states that one misconception is that it was:
“possible to protect local users who dealt with FTX, such as by ringfencing their assets or ensuring that FTX backed its assets with reserves. MAS cannot do this as FTX is not licensed by MAS and operates offshore. MAS has consistently warned about the dangers of dealing with unregulated entities.”
Another question is in regards to Binance, which was placed on the Investor Alert List (IAL) but FTX was not.
MAS explains that while both Binance and FTX are not licensed in Singapore, there is a difference between the two:
“Binance was actively soliciting users in Singapore while FTX was not. Binance, in fact, went to the extent of offering listings in Singapore dollars and accepted Singapore-specific payment modes such as PayNow and PayLah.”
MAS states that it has received several complaints about Binance between January and August 2021 in regard to solicitation.
As for FTX, there were no indications of soliciting Singapore residents, and trades could not be completed in Singapore dollars. At the same time, MAS recognizes that FTX could be accessed online by Singapore users.
MAS reports that it referred the Commercial Affairs Department to commence an investigation into Binance for possible contravention of the Payment Services Act (PS Act), while there was no reason to place FTX on the IAL as there was no evidence that it had contravened the PS Act.
Another question is whether MAS should exhaustively list on the IAL and provide information on all the offshore crypto exchanges in the world. As there are hundreds of such exchanges, MAS says it is not possible to list all of them, and no regulator in the world has done so.
MAS says the most important lesson from the collapse of FTX is that dealing in any cryptocurrency on any platform is hazardous – even if the platform is well-managed.