Singapore central bank explains why Binance was on its alert list but FTX was not

Singapore central bank explains why Binance was on its alert list but FTX was not

The Monetary Authority of Singapore (MAS), the country’s central bank, issued a statement on November 21 to address “some questions and misconceptions that have arisen in the wake of the (FTX) debacle.” The agency explained that

The first point MAS wanted to make was that it could not protect local users from the fallout from FTX collapse “such as by ring-fencing their assets or ensuring that FTX backed its assets with reserves” because “FTX is not licensed by MAS and operates offshore .MAS has consistently warned of the dangers of dealing with unregulated devices.”

Nevertheless, it was Binance that ended up on the MAS Investor Alert List. That was because Binance, unlike FTX, actively targeted users in Singapore with offers denominated in Singapore dollars and payment options through local senders. MAS noted that it had received “several” complaints about Binance between January and August 2021.

MAS prompted Binance to stop soliciting Singaporean users and take more measures to show compliance, such as geoblocking local IP addresses. It also referred Binance to the country’s commercial department to investigate whether the exchange had violated the Payment Services Act. Singaporean users could still access FTX services.

Related: MAS Distrusts Retail Crypto Investments, Considers More Regulations

The purpose of the Investor Alert List, MAS explained, is “to warn the public about entities that may be mistakenly perceived as MAS-regulated, particularly those soliciting Singapore customers for financial business without the required MAS license.” That doesn’t mean the list should include all “hundreds” of crypto exchanges worldwide, according to MAS. “It is not possible to list all of them and no regulator in the world has done so,” it said.

MAS went on to issue sweeping warnings about the volatility of cryptoassets, admitting:

“Even if a crypto exchange is licensed in Singapore, it will currently only be regulated to address money laundering risks, not to protect investors. This is similar to the approach in most jurisdictions.”

However, MAS released a consultation document on consumer protection for crypto users in October.

State-owned investment company Temasek issued a statement on November 19 saying it had conducted eight months of due diligence on FTX in 2021 without finding any problems. Singapore police have issued a warning about phishing websites trying to cash in on the confusion surrounding the FTX collapse.