Singapore authorities address FTX accusations

MAS defends itself against claims that it failed to protect Singaporean investors

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Singapore’s monetary authority has defended itself against accusations it failed to safeguard Singaporean users of FTX.

The Monetary Authority of Singapore, addressing what it claimed was "a number of misconceptions”,said that as FTX was unlicensed and operating offshore it was not possible for the regulator to protect local users who dealt with FTX .

It stressed that it had “consistently warned about the dangers of dealing with unregulated entities.”

Critics had questioned why MAS placed Binance, the world’s largest cryptocurrency exchange, on its investor alert list but not FTX. 

In response, the authority said that it had placed Binance on its IAL list because “it had solicited Singapore users without a licence”, accepted Singapore-specific payment methods and had offered listings in Singapore dollars. 

By contrast, “there was no evidence” that FTX “was soliciting Singapore users specifically.”

The authority continued: “The ongoing turmoil in the crypto industry serves as a reminder of the huge risks of dealing in cryptocurrencies. As MAS has repeatedly stated, there is no protection for customers who deal in cryptocurrencies. They can lose all their money.”

FTX fraud warning

Over the weekend, the Singapore Police Force warned that fraudsters were capitalising on the uncertainty generated by the ongoing FTX scandal.

The nation’s authorities issued an alert over the weekend about a website which claimed to be hosted by the United States Department of Justice and claimed to be able to assist users of the collapsed cryptocurrency exchange. 

According to a local news agency, Channel News Asia, the unnamed website invited users to log in with their FTX account details and offered to reimburse them after the payment of “legal fees”. 

Singapore police said that the website was a phishing scam designed to trick users into divulging their personal details. The force also alerted citizens to fraudulent online promotions of automatic cryptocurrency trading promotions that often used the likenesses of leading politicians. 

The FTX scandal has rocked confidence in the cryptocurrency sector among both retail and institutional investors. 

Reports that FTX’s senior leadership, including its founder and then-CEO, Sam Bankman-Fried, had misused client funds triggered a stampede of users attempting to withdraw their funds. FTX, unable to find adequate liquidity or a firm to rescue it,  filed for Chapter 11 bankruptcy protection in the United States.

In a further blow to investor sentiment, on the same day that the company filed for bankruptcy and replaced its CEO, an unknown hacker drained more than $300m from FTX users’ wallets.

FTX’s new leadership has revealed that the company owes around $3.1bn to its 50 largest creditors and that its total number of creditors could pass one million.

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