MAS Failed To Protect Singapore Users From FTX Risks

MAS released a notice that FTX has not been licensed to operate in Singapore, so it cannot protect users who have contact with this exchange.

The Monetary Authority of Singapore (MAS) today released a statement on the confusion and misunderstandings following the collapse of FTX. The regulator clarified that it cannot include local users who transact with FTX because FTX is not licensed by MAS and operates overseas, at the same time MAS warned about the dangers of dealing with unregulated entities.

Furthermore, MAS explained why Binance was included in the investor alert list while FTX was not. Although neither Binance nor FTX are licensed here, there is a clear difference between the two: Binance actively attracts users in Singapore, while FTX is not.

Besides, Binance actually operates in Singapore dollars and accepts Singapore-specific payment methods like PayNow and PayLah. Between January 2021 and August 2021, MAS received numerous complaints about Binance, and Binance also made announcements to attract unlicensed customers in multiple jurisdictions.

Regarding FTX, there is no evidence that it only attracts Singaporean users, nor can transactions on FTX be done in Singapore dollars. In addition, MAS said that on the recommendation of MAS, the country’s Ministry of Commerce has initiated an investigation into whether Binance may have violated the Payment Services Act.

MAS has asked Binance to stop attracting Singaporean users. These measures are intended to clearly demonstrate that Binance has ceased to offer and provide services to users in Singapore.

The MAS also stated that it is unable to list and provide information on all foreign cryptocurrency exchanges in the world on its investor alert list because there are too many and no regulatory authority. No reason in the world to do that.

The most important lesson of the failure of FTX is that trading any cryptocurrency on any platform is dangerous, crypto exchanges can fail. Even if a cryptocurrency exchange is licensed in Singapore, it is currently only regulated to address money laundering risks and not to protect investors.

Moreover, even if crypto exchanges are well regulated, cryptocurrencies themselves are very volatile so there is a lot of risk and in fact proved many of them have lost their value.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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