The Monetary Authority of Singapore (MAS) released a statement Monday aimed at clarifying common misconceptions regarding the FTX and Binance in the city-state. Among other things, the MAS explained why it was impossible to protect Singapore-based users from the FTX debacle and reminded them of the “huge risks” of dealing in crypto.
MAS Says Binance Was Actively Soliciting Users in Singapore
The Monetary Authority of Singapore (MAS) published a “statement to address misconceptions” concerning the recent collapse of FTX. The crypto exchange filed for bankruptcy earlier this month following a liquidity crunch.
Primarily, the MAS clarified why it could not protect crypto users in Singapore from the FTX debacle “by ringfencing their assets or ensuring that FTX backed its assets with reserves.” The central bank said this was impossible to do because FTX is not licensed by MAS and operates offshore. It added that it “consistently” warned users about using services of unregulated firms.
The central bank also answered why it has placed Binance on the Investor Alert List (IAL) while FTX was not listed. The MAS said Binance was consistently soliciting users in Singapore and even providing certain listings in Singapore dollars.
“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. Binance in fact went to the extent of offering listings in Singapore dollars and accepted Singapore-specific payment modes such as PayNow and PayLah.”
Furthermore, the central bank said it received multiple complaints about Binance in the period from January to August 2021, including reports in several jurisdictions about unlicensed solicitation of users by the world’s biggest crypto exchange. On the other hand, the MAS said it had no evidence that FTX was soliciting Singapore users, adding trades there could not be conducted in Singapore dollars.
“Crypto Exchanges Can and Do Fail,” MAS Highlights
While the MAS addressed numerous points with regard to FTX and Binance, Singapore’s central bank and regulator emphasized the risks of crypto trading and the uncertainty around crypto exchanges. It stressed that “the most important lesson from the FTX debacle is that dealing in any cryptocurrency, on any platform, is hazardous.”
“Crypto exchanges can and do fail,” added MAS. Even if a crypto exchange is licensed by MAS, the regulatory framework there only addresses money-laundering risks, and not user funds protection, it said. Furthermore, even if a crypto exchange is cautiously managed, crypto assets themselves are “highly volatile,” with many of them losing significant value in the recent period.
The regulator’s statement comes more than a week after the FTX collapsed. The crypto exchange’s demise significantly affected crypto trading and crypto prices, with over 220,000 BTC pulled out from exchanges in the week after the FTX’s implosion.
This article originally appeared on The Tokenist
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