Key Takeaways:
- Singapore regulators defend their decision to issue a warning to Binance but not to FTX.
- MAS states FTX is not on its investor alert List since FTX’s activities were not directly aimed at users from Singapore.
The Monetary Authority of Singapore (MAS) did not add the cryptocurrency exchange FTX to its investor warning list because it was not actively pursuing consumers in Singapore, the authority said on Monday.
One common misunderstanding is that local users who transacted with FTX could be safeguarded, for example, by “ringfencing” their assets or ensuring that FTX backed its assets with reserves. FTX functions offshore and does not have a license from MAS, so MAS was unable to do this.
However, after the Monetary Authority of Singapore (MAS) did receive multiple complaints about the exchange between January and August 2021, the MAS added Binance to Singapore’s Investor Alert List (IAL) and requested that the Commercial Affairs Department investigate (Nov 21).
According to the regulator, MAS was reacting to queries and misunderstandings that have emerged especially in the aftermath of the FTX.com fiasco.
Given its current state, FTX is under constant investigative processes. The Bahamas-based cryptocurrency exchange filed for bankruptcy in the US on November 11 and is alleged to owe its top 50 creditors nearly US$3.1 billion ($4.26 billion).
FTX.com was neither licensed nor exempt from licensing in Singapore, according to a clarification from MAS on November 14.
Furthermore, MAS discussed how it treated fellow cryptocurrency exchanges FTX.com and Binance.com differently and why the aforementioned was added to the Investor Alert List (IAL) while the latter was not.
The difference between the two exchanges was “clear” in the central bank’s eyes.MAS said there was a “clear difference” between FTX and Binance, which was prohibited from offering payment services to Singapore residents in September.
Singapore dollars could not be used to make trades on FTX. However, Singaporeans were able to obtain FTX services online, just as they could, with the thousands of other financial and cryptocurrency companies that run their operations abroad.
According to the statement, “Binance actually went as far as to offer listings in Singapore dollars and accept Singapore-centric payment methods such as PayNow and PayLah.“
Since Binance had prompted Singapore users without a permit, MAS put Binance on the investor alert list, according to the authority.
The Commercial Affairs Department began looking into Binance for potential Payment Services Act violations after receiving a referral from MAS.
Binance implemented several measures, which includes geo-blocking Singapore IP addresses and expelling its smartphone app from Singapore app stores, after the regulator ordered it to stop enlisting Singapore users.
The MAS claims it is impossible to provide an extensive array on the IAL or details on all offshore cryptocurrency exchanges because there are “hundreds of such exchanges and thousands of other offshore entities.”
No authority in the entire world has done this, MAS further clarified.
