Singapore defends its treatment of Binance after FTX ‘debacle’
Singapore’s central bank has responded to criticism of its treatment of two of the world’s largest crypto exchanges, explaining why Binance was on an investor watch list while FTX, which has filed for bankruptcy, was not.
In a statement Monday, the Monetary Authority of Singapore (MAS) said it wanted to clear up “questions and misconceptions” that had come up since the implosion of FTX, which until this month was one of the biggest cryptocurrency firms globally.
The MAS had received queries on why Binance, the world’s top exchange, had been placed on its investor alert list, which warned users that it was not licensed or regulated locally.
“While both Binance and FTX are not licensed here, there is a clear difference between the two: Binance was actively soliciting users in Singapore while FTX was not,” the MAS said.
“With regard to FTX, there was no evidence that it was soliciting Singapore users specifically.”
Regulators are expected to step up their oversight of the industry as a result of its worst-ever turmoil. According to court documents filed last week, dozens of regulatory agencies around the world have been in contact with FTX specifically over its collapse, pointing to the potential scope of its impact across jurisdictions.
In recent years, Singapore has emerged as a regional hub for cryptocurrency startups. But lately, officials there have increased calls for greater regulation of the industry, with the MAS releasing new proposals in October that it said would “reduce risks to consumers from cryptocurrency trading.”
The bank added that it had received multiple complaints about Binance, leading authorities to instruct the company to pull back its activities in the city-state.
To appease officials, the exchange rolled out new measures, such as blocking traffic from the country’s users and taking down its app from local app stores, the MAS said.
Unlike other industry players, Binance has emerged relatively unscathed during what some are calling a “crypto winter,” which refers to the sector’s ongoing global liquidity crisis. The firm recently launched a so-called “recovery fund” to help entrepreneurs facing a cash crunch.
FTX, by comparison, recently filed for bankruptcy after failing to secure a lifeline from Binance over its own money troubles.
Before its implosion, FTX was valued at $32 billion and had recruited high-profile backers including SoftBank and Tiger Global, as well as celebrities such as Tom Brady, Gisele Bündchen, and Naomi Osaka. Now, they are running for cover.
In recent weeks, investor Sequoia Capital and Singapore’s state-owned investment firm, Temasek, have each written down the value of their respective FTX stakes down to $0. Legal headaches for FTX have also been piling up.
Singapore’s central bank said that contrary to what some had suggested, the goal of its investor watch list was to clarify whether financial entities were licensed or not in the country and not to provide alerts on offshore crypto exchanges.
In its statement, the bank sought to strike a note of caution for all investors, asserting that “the most important lesson from the FTX debacle is that dealing in any cryptocurrency, on any platform, is hazardous.”
“The ongoing turmoil in the crypto industry serves as a reminder of the huge risks of dealing in cryptocurrencies,” the MAS said. “There is no protection for customers who deal in cryptocurrencies. They can lose all their money.”
— Diksha Madhok contributed to this report.
™ & © 2022 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.