MAS dispels Binance and FTX treatment misconceptions following the latter’s collapse

by
Crypto Regulation
MAS dispels Binance and FTX treatment misconceptions following the latter’s collapse

On November 21st, the Monetary Authority of Singapore (MAS) released a statement addressing a few misconceptions surrounding crypto exchange FTX and Binance. In the statement, MAS stated that they listed Binance to the IAL because the exchange continued soliciting investors without a license. The statement also mentioned that the ongoing crypto turmoil is a huge reminder that the blockchain market has risks. 

Singapore’s MAS treated Binance and FTX differently 

The press statement by the MAS, a Singaporean financial watchdog, addressed some misconceptions about the FTX collapse. The statement begins by saying; 

“The Monetary Authority of Singapore (MAS) would like to address some questions and misconceptions that have arisen in the wake of the FTX.com (FTX) debacle.”

One of the  ‘misconceptions’ addressed is regarding the different treatments Binance and FTX exchange received. There were questions about why the MAS treated Binance, placing them on Investor Alert List (IAL), while the same was not done for FTX. 

Singapore placed Binance on the IAL sometime in September 2021. However, after the fall of FTX just recently, investors have continually questioned why FTX was never placed on the IAL.

Binance solicited investors without a license 

In their statement, MAS denoted that Binance was listed on the IAL simply because they participated in soliciting investors in Singapore without a license. The statement noted that none of the two exchange platforms is registered in the country. 

According to the statement, Binance exchange lists asses by using the Singaporean dollar. Furthermore, the exchange added Singaporean-accepted payment methods like PayLah and Paynow.  

Furthermore, the MAS received complaints about the Binance exchange between January and August last year. In that period, Binance continued with unlicensed solicitation of Singaporean citizens. 

The MAS also claimed that they asked Binance to stop soliciting investors. The exchange blocked Singaporean IP addresses and even removed the Binance app from Singapore’s app stores. The measures aimed to demonstrate that Binance stopped soliciting and even offering services in Singapore. However, the MAS statement noted that; 

“Should Binance decide to dismantle some of these restrictions, it must continue to comply with the prohibition against soliciting Singapore users without a license.”

Contrarily, no trades in FTX are listed in the Singaporean native currency. Moreover, FTX did not solicit Singaporean users specifically. 

The watchdogs asked the Comercial Affairs Department to start investigations into Binance for contravening the Payment Service Act. However, there was no reason to place FTX on the IAL at the time.

Other misconceptions addressed by MAS

Aside from the misconception about Binance, there was another question on if MAS should list all the offshore crypto exchanges on the IAL. The MAS noted that it’s impossible to list all exchanges and crypto-related payment platforms—no regulator globally has done so. 

The MAS mentioned that even exchanges not listed in the IAL are not 100% safe for investors. MAS further noted that the fall of a crypto giant (FTX) proves that dealing with any cryptocurrency is risky. Even licensed crypto exchanges can fail. Even when crypto exchanges are properly managed, the virtual assets themselves are highly volatile.