Key Takeaways:
- MAS claims that FTX.com is not operational in Singapore.
- It is, however, impossible to prevent Singaporeans from attempting to contact foreign service providers directly.
According to the Monetary Authority of Singapore (MAS), the defunct cryptocurrency exchange FTX is not currently active there, Wu Blockchain disclosed on November 14.
In Singapore, FTX.com is neither authorised nor explicitly excluded from authorization. However, it is impossible to stop Singapore users from directly contacting foreign service providers. As a result, FTX.com was able to add Singaporean users. Interacting with unlicensed entities carries risks, as the MAS has repeatedly emphasized to the public.
Since 2017, MAS has repeatedly warned the public that dealing in cryptocurrencies is extremely risky, according to a MAS spokesperson.
Whether “banning” Binance and adding it to the Investor Alert List (IAL) caused Singapore users to invest through FTX.com has been questioned. Singapore did not impose a ban on Binance business operations.
Instead, it was forced to stop soliciting customers from Singapore because it lacked the necessary license. The IAL is kept up to date for companies that might be mistakenly believed to be subject to MAS regulation.
Providers of digital payment token services that are authorised by MAS under the Payment Services Act are subject to regulation for technology risks, money laundering, and terrorism financing risks, but not for security and rightness. They are not obligated to safeguard customer funds or digital tokens from the probability of default, and they are not susceptible to risk-based capital or liquidity prerequisites.
This is consistent with how most jurisdictions operate. It’s also the reason why MAS has consistently warned the public—starting in 2017—that trading in cryptocurrencies is extremely risky.
MAS notes that both companies run independently in response to why FTX did not transfer Singapore users to Quoine, which runs Singapore’s Liquid exchange.
On October 26, 2022, MAS published a consultation paper outlining compliance measures to lower the risks associated with cryptocurrency trading for consumers. Despite these precautions, customers should still trade cryptocurrencies with extreme caution. Rules and regulations cannot shield consumers from losses brought on by the highly risky and inherently speculative nature of cryptocurrency trading. – A MAS representative
FTX is currently the subject of intense regulatory inspection. The Bahamas’ financial watchdog claimed it neither instructed nor permitted FTX to prioritize local withdrawals. A U.S. Securities and Exchange Commission investigation into the exchange’s handling of client funds is also ongoing.
