In response to media queries, the Monetary Authority of Singapore (MAS) has clarified that the troubled crypto exchange FTX.com does not operate in Singapore.
“FTX.com is neither licensed nor exempted from licensing in Singapore. It is not possible, however, to prevent Singapore users from directly accessing overseas service providers. FTX.com was therefore able to onboard Singapore users,” a MAS spokesperson says.
Once valued at US$32 billion, FTX.com filed for bankruptcy last week after traders rushed to withdraw their holdings from the platform, following a failed rescue deal with its rival exchange, Binance.
FTX.com’s subsidiary Quoine — which operates crypto trading platform Liquid in Singapore — is currently exempt from licensing while its licence application is under review. The MAS says it is carefully reviewing the application, taking into account recent developments.
The funds of Singapore investors in FTX.com are not parked under Quoine given that the two operate as separate legal entities. MAS has not required FTX.com to migrate Singapore users to Quoine, the spokesperson says.
“Digital payment token service providers licensed by MAS under the Payment Services Act are regulated for money laundering and terrorism financing risks as well as technology risks, but not safety and soundness. They are not subject to risk-based capital or liquidity requirements, nor are they required to safeguard customer monies or digital tokens from insolvency risk.
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“This is similar to the approach taken in most jurisdictions. It is also why MAS has been continually reminding the general public since 2017 that dealing in cryptocurrency is highly hazardous," the spokesperson adds.
The MAS has issued a consultation paper on Oct 26 proposing regulatory measures to reduce consumer risks from crypto trading. Notwithstanding these measures, consumers must continue to exercise utmost caution when trading in cryptocurrency, the spokesperson says.
“Regulations cannot protect consumers from losses arising from the inherently speculative and highly risky nature of cryptocurrency trading."
