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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 “extremely risky and plenty of of them have misplaced all worth.”
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 handle some questions and misconceptions which have arisen within the wake of the FTX.com (FTX) debacle.”
The central financial institution defined: “A primary false impression is that it was attainable to guard native customers who handled FTX … MAS can not do that as FTX will not be 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 should 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. Just a few months later, the crypto alternate shut down its alternate companies within the city-state.
“Binance in truth went to the extent of providing listings in Singapore {dollars} and accepted Singapore-specific fee modes reminiscent of Paynow and Paylah,” the central financial institution harassed, 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 no licence. Additional, on MAS’ referral, the Industrial Affairs Division commenced investigation into Binance for attainable contravention of the Fee Providers Act (PS Act). There was no cause to put 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 proof that it was soliciting Singapore customers particularly. Trades on FTX additionally couldn’t be transacted in Singapore {dollars}. However as within the case of 1000’s of different monetary and crypto entities that function abroad, Singapore customers have been capable of entry FTX companies on-line.”
A current research indicated that when Binance shut down companies in Singapore, its customers switched to FTX. Subsequently, extra customers from Singapore have 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 “An important lesson from the FTX debacle is that dealing in any cryptocurrency, on any platform, is hazardous” and traders “can lose all their cash,” the MAS warned:
Crypto exchanges can and do fail. Even when a crypto alternate is licensed in Singapore, it could be at the moment solely regulated to handle money-laundering dangers, to not defend traders.
Moreover, the MAS emphasised: “Cryptocurrencies themselves are extremely risky and plenty of of them have misplaced all worth … The continued turmoil within the crypto business serves as a reminder of the massive dangers 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 consider the clarification by the Financial Authority of Singapore? Tell us within the feedback part under.
Picture Credit: Shutterstock, Pixabay, Wiki Commons
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