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 towards crypto alternate Binance and never the collapsed crypto platform FTX. The central financial institution additionally warned that cryptocurrencies are “highly volatile and many of them have lost all value.”
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 address some questions and misconceptions that have arisen in the wake of the FTX.com (FTX) debacle.”
The central financial institution defined: “A first misconception is that it was possible to protect local users who dealt with FTX … MAS cannot do this as FTX is not licensed by MAS and operates offshore.”
The MAS proceeded to justify the motion it took towards 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 usually are not 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 stop offering fee companies to Singapore residents in September final yr. A number of months later, the crypto alternate shut down its alternate companies within the city-state.
“Binance in fact went to the extent of offering listings in Singapore dollars and accepted Singapore-specific payment modes such as Paynow and Paylah,” the central financial institution careworn, 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 with out a licence. Additional, on MAS’ referral, the Industrial Affairs Division commenced investigation into Binance for attainable contravention of the Cost 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 evidence that it was soliciting Singapore users specifically. Trades on FTX also could not be transacted in Singapore dollars. But as in the case of thousands of other financial and crypto entities that operate overseas, Singapore users were able to access FTX services online.”
A latest research indicated that when Binance shut down companies in Singapore, its customers switched to FTX. Subsequently, extra customers from Singapore had been utilizing the FTX.com web site earlier than the alternate collapsed than from another nation, besides South Korea.
Singapore’s Central Financial institution Warns Concerning the Dangers of Investing in Crypto
Noting that “The most important lesson from the FTX debacle is that dealing in any cryptocurrency, on any platform, is hazardous” and traders “can lose all their money,” the MAS warned:
Crypto exchanges can and do fail. Even if a crypto alternate is licensed in Singapore, it could be at the moment solely regulated to handle money-laundering dangers, to not shield traders.
Moreover, the MAS emphasised: “Cryptocurrencies themselves are highly volatile and many of them have lost all value … The ongoing turmoil in the crypto industry serves as a reminder of the huge risks 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 traders with restrictive guidelines.
What do you concentrate on the clarification by the Financial Authority of Singapore? Tell us within the feedback part under.
Kevin Helms
Picture Credit: Shutterstock, Pixabay, Wiki Commons
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