Singapore Regulator Explains Action Against Binance vs FTX — Warns Even Licensed Crypto Exchanges Can Fail – Regulation Bitcoin News


The Financial Authority of Singapore (MAS), the regulator overseeing the crypto sector, has defended the motion it took in opposition to crypto alternate Binance and never the collapsed crypto platform FTX. The central financial institution additionally warned that cryptocurrencies are “extremely risky and plenty of of them have misplaced all worth.”

Singapore’s Central Financial institution Clarifies Its Stance on Binance and FTX

The Financial Authority of Singapore (MAS), the nation’s central financial institution, issued a press launch this week “to deal with some questions and misconceptions which have arisen within the wake of the FTX.com (FTX) debacle.”

The central financial institution defined: “A primary false impression is that it was potential to guard native customers who handled FTX … MAS can not do that as FTX isn’t licensed by MAS and operates offshore.”

The MAS proceeded to justify the motion it took in opposition to Binance and never FTX. The previous was positioned on the central financial institution’s Investor Alert Checklist (IAL) whereas the latter was not. The regulator clarified:

Whereas each Binance and FTX will not be licensed right here, there’s a clear distinction between the 2: Binance was actively soliciting customers in Singapore whereas FTX was not.

The MAS ordered Binance to cease offering cost providers to Singapore residents in September final 12 months. Just a few months later, the crypto alternate shut down its alternate providers within the city-state.

“Binance in actual fact went to the extent of providing listings in Singapore {dollars} and accepted Singapore-specific cost modes akin to Paynow and Paylah,” the central financial institution burdened, including that it acquired a number of complaints about Binance between January and August 2021. The MAS detailed:

MAS positioned Binance on the IAL as a result of it had solicited Singapore customers and not using a licence. Additional, on MAS’ referral, the Industrial Affairs Division commenced investigation into Binance for potential contravention of the Fee Providers Act (PS Act). There was no motive to position FTX on the IAL as there was no proof that it had contravened the PS Act.

Commenting on FTX particularly, the regulator famous: “There was no proof that it was soliciting Singapore customers particularly. Trades on FTX additionally couldn’t be transacted in Singapore {dollars}. However as within the case of 1000’s of different monetary and crypto entities that function abroad, Singapore customers have been in a position to entry FTX providers on-line.”

A current examine indicated that when Binance shut down providers in Singapore, its customers switched to FTX. Subsequently, extra customers from Singapore have been utilizing the FTX.com web site earlier than the alternate collapsed than from every other nation, besides South Korea.

Singapore’s Central Financial institution Warns In regards to the Dangers of Investing in Crypto

Noting that “An important lesson from the FTX debacle is that dealing in any cryptocurrency, on any platform, is hazardous” and buyers “can lose all their cash,” the MAS warned:

Crypto exchanges can and do fail. Even when a crypto alternate is licensed in Singapore, it will be at present solely regulated to deal with money-laundering dangers, to not shield buyers.

Moreover, the MAS emphasised: “Cryptocurrencies themselves are extremely risky and plenty of of them have misplaced all worth … The continuing turmoil within the crypto business serves as a reminder of the large dangers of dealing in cryptocurrencies.”

Following the meltdown of FTX, Singapore authorities’s Temasek wrote down its $275 million funding within the crypto firm. Singapore has been attempting to scale back dangers for retail crypto buyers with restrictive rules.

What do you concentrate on the clarification by the Financial Authority of Singapore? Tell us within the feedback part beneath.

Kevin Helms

A pupil of Austrian Economics, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His pursuits lie in Bitcoin safety, open-source techniques, community results and the intersection between economics and cryptography.

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