Why Was FTX Not On MAS Alert List?
Just a couple of days after FTX had filed for Chapter 11 bankruptcy protection, Singaporean residents started with MAS criticism. The main reason for this is the fact that MAS, the Central Bank of Singapore, has added Binance.com to the Investor Alert List (IAL), while FTX was not there. Thus, citizens believed this exchange was perfectly safe to invest in, which led to significant losses after the bankruptcy.
According to the CoinGecko report, Singapore was the second largest market of the FTX, with over 240,000 unique visits each month from January to October 2022. These numbers are just a bit behind South Korea, which takes first place, with nearly 300,000 unique visits, and just a bit ahead of Japan, with 223,000.
So, what does MAS have to say now?
FTX Exchange Was Legal In Singapore?
According to the FTX official website (while it was accessible), the company was not on the MAS alert list, implying that they could provide legal services in the said country. While it’s a bit of a gray zone, you could also see it as an approval.
On the other hand, binance.com, the main website of the largest crypto exchange, Binance, was added to the IAL, with the explanation that this particular exchange has no authorization to offer crypto services to the residents of Singapore. After seeing one such publication, one may be led to believe that FTX is, indeed, legitimate.
Simply said, FTX was not legally authorized but also not blacklisted. So, what does that mean for their investors?
MAS Official Statement
On November 21st, MAS issued an official statement after many inquiries related to Binance and FTX’s regulation status. Using FTX in Singapore was not illegal, so how can their investors get reimbursed?
MAS stated that both companies were not licensed by the authority body, with one crucial difference. Binance was actively onboarding Singaporean residents, which is why it found its place on the alert list. According to the MAS, the authority body received several complaints in 2021 regarding binance.com, which has led to an official warning. Further, this warning put Binance under investigation by the Commercial Affairs Department for possible infringement of the Payment Services Act.
Au contraire, many users have given anonymous statements, sharing their experiences with the FTX exchange. According to MAS, FTX never actively onboarded Singaporean clients. However, after the bankruptcy, we’ve discovered that large companies had over $420 million invested in FTX, including over $270 million from Temasek, funds from state-owned Sequoia Capital, and much more. So, what’s that if not onboarding?
While MAS announced a proposal earlier in October that should reduce risks to crypto investors and protect them, we believe this shows a grand failure. Not only will they have to speed up the process, but there will be lots of questions regarding their judgment. Especially since Binance was not affected by the crisis, unlike some other exchanges.
“The most important lesson from the FTX debacle is that dealing in any cryptocurrency, on any platform, is hazardous.” – the MAS said.
What Can Investors Do?
Now, after everything, investors can file a claim with the official regulator and hope for the best. Since FTX was never officially approved by the Monetary Authority of Singapore, there’s a slight chance of getting their funds back.
The situation may not look so great, but we believe in justice. With many ongoing investigations, including one in the US and the Bahamas, authorities will work together to find a way to reimburse crypto victims.
It’s not an ideal situation, but we can all learn from what happened. Our staff is at your service if you need any advice on starting an official claim.
