Singapore Regulator Explains Sanctions Against Binance Following FTX Crash
In response to the crash, the Monetary Authority of Singapore (MAS) swiftly moved against Binance rather than the now-defunct FTX. MAS has explained its action.
As a result of Binance ceasing operations in Singapore, users switched to FTX.
Singapore’s Actions Towards FTX Crash
The regulatory body in charge of regulating cryptocurrency activities in Singapore, known as MAS, recently cleared Binance rather than the Bankrupt FTX, but it has since come forward to defend its decision.
The central bank of Singapore has also expressed concerns and warnings about how volatile cryptocurrencies are, with many eventually becoming worthless and losing value.
Singapore’s central bank issued a statement on November 21 outlining the causes it thought led to the meltdown and collapse of the FTX.
The flaw in MAS’s strategy regarding them thinking it was possible to save and distinguish local users from people connected to FTX has been pointed out here. This turned out to be false because FTX operates outside of Singapore’s borders and is therefore not subject to Singapore’s regulation.
Instead of focusing on the cause of the market crash, FTX, MAS has instead chosen to focus on Binance. The first time this query was made against Binance, the exchange showed up on Singapore’s alert list where other companies weren’t even listed.
However, the regulators confirmed that both are licensed; The Singapore central bank received numerous complaints about Binance in 2021.
Regulations In Singapore
Following this incident, an investigation into Binance to look for potential violations of the Payment Service Act and regulations was launched. However, since there was no reason to believe that the FTX exchange had violated this same act, this was now applied to it.
Binance had previously issued a warning that it would be ceasing all of its operations in Singapore, and after it did the majority of users switched to the FTX platform.
The MAS also issued a warning, stating that although cryptocurrency exchanges can succeed and fail concurrently, it is their duty to the nation to place these organizations under regulations, which will allow them to be closely watched and flag up any instances of money laundering or project manager fraud; as well as safeguard investors’ money from the possibility of losing it all to these pervasive Ponzi schemes.
Singapore Temasek withdrew its $275 million investment from FTX after the company’s demise. Singapore has also taken a step forward in its quest to minimize risk and cut losses by pushing for structural regulations to be imposed on businesses and exchanges operating in the crypto sector.
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