Home Cryptocurrency Singapore’s MAS: FTX Not Licensed, Protection of Local Users Impossible

Singapore’s MAS: FTX Not Licensed, Protection of Local Users Impossible


The Monetary Authority of Singapore (MAS) has clarified that it was not possible for the central bank to protect local users of the services of the beleaguered cryptocurrency exchange, FTX, as the business was not licensed to provide virtual asset services in the country.

“A first misconception is that it was possible to protect local users who dealt with FTX, such as by ringfencing their assets or ensuring that FTX backed its assets with reserves. MAS cannot do this as FTX is not licensed by MAS and operates offshore,” MAS explained in a press statement released on Monday.

The financial regulatory authority also faulted the belief that Singaporean investors’ assets in FTX could have been protected if they were domiciled in the crypto exchange’s local subsidiary, Quoine Pte Limited. MAS dismissed this, adding that “Quoine, like other overseas subsidiaries of FTX, has been included in the US bankruptcy proceedings and has halted withdrawals.”

The regulator’s comment comes on the heel of the collapse of the once-beloved FTX whose fall was precipitated by a liquidity crisis and its failed attempt for a bail-out, forcing it to file for bankruptcy protection in the United States.

FTX’s Debts

A number of developments have marked the fallout of FTX so far. Last Thursday, John Ray III, the new CEO of FTX, described the running of the FTX Group under Sam Bankman-Fried, Co-Founder and former CEO, as “a complete failure of corporate controls.” This is even as over $600 million was drained from FTX wallets hours after the crypto exchange filed for bankruptcy.

In the latest, a bankruptcy document filed over the weekend shows that FTX, once the fast-growing crypto exchange, owes $3.1 billion to its top 50 unsecured creditors, with the largest and second-largest creditors owed over $226 million and $203 million, respectively. On top of that, an earlier bankruptcy filing suggests that the exchange, which was valued at $34 billion at its last funding round, may have over 1 million creditors.

Following FTX’s collapse, several venture capital firms such as Singapore’s Temasek, Soft Bank’s Vision Fund, and Sequoia Capital, have been writing off millions of dollars of their investments in FTX.

According to reports, FTX under Bankman-Fried lent out billions of its customer funds to corporate sibling Alameda Research for leveraged crypto trades. This resulted in its fall when FTX ran into a bank run and “liquidity crunch” after the crypto exchange’s close-knit balance sheet with Alameda Research became public knowledge.

The Monetary Authority of Singapore (MAS) has clarified that it was not possible for the central bank to protect local users of the services of the beleaguered cryptocurrency exchange, FTX, as the business was not licensed to provide virtual asset services in the country.

“A first misconception is that it was possible to protect local users who dealt with FTX, such as by ringfencing their assets or ensuring that FTX backed its assets with reserves. MAS cannot do this as FTX is not licensed by MAS and operates offshore,” MAS explained in a press statement released on Monday.

The financial regulatory authority also faulted the belief that Singaporean investors’ assets in FTX could have been protected if they were domiciled in the crypto exchange’s local subsidiary, Quoine Pte Limited. MAS dismissed this, adding that “Quoine, like other overseas subsidiaries of FTX, has been included in the US bankruptcy proceedings and has halted withdrawals.”

The regulator’s comment comes on the heel of the collapse of the once-beloved FTX whose fall was precipitated by a liquidity crisis and its failed attempt for a bail-out, forcing it to file for bankruptcy protection in the United States.

FTX’s Debts

A number of developments have marked the fallout of FTX so far. Last Thursday, John Ray III, the new CEO of FTX, described the running of the FTX Group under Sam Bankman-Fried, Co-Founder and former CEO, as “a complete failure of corporate controls.” This is even as over $600 million was drained from FTX wallets hours after the crypto exchange filed for bankruptcy.

In the latest, a bankruptcy document filed over the weekend shows that FTX, once the fast-growing crypto exchange, owes $3.1 billion to its top 50 unsecured creditors, with the largest and second-largest creditors owed over $226 million and $203 million, respectively. On top of that, an earlier bankruptcy filing suggests that the exchange, which was valued at $34 billion at its last funding round, may have over 1 million creditors.

Following FTX’s collapse, several venture capital firms such as Singapore’s Temasek, Soft Bank’s Vision Fund, and Sequoia Capital, have been writing off millions of dollars of their investments in FTX.

According to reports, FTX under Bankman-Fried lent out billions of its customer funds to corporate sibling Alameda Research for leveraged crypto trades. This resulted in its fall when FTX ran into a bank run and “liquidity crunch” after the crypto exchange’s close-knit balance sheet with Alameda Research became public knowledge.





Source link

RELATED ARTICLES

Metaverse comes in second place for Oxford’s word of the year

The Oxford University Press team chose 'metaverse’ to come in as a runner-up to ‘Goblin mode’ for the word of the year in...

Bitcoin Technical Analysis Report | 05th-December-2022

If Bitcoin surges through the $17,622 resistance then APE and AAVE could start posting outsized gains. Although the FTX crisis has broken the...

Bitcoin Will Not Submit To Black Swans

Bitcoin’s responses to black swans are irrelevant to its continued success as a protocol used around the world.Bitcoin’s responses to black swans are...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Metaverse comes in second place for Oxford’s word of the year

The Oxford University Press team chose 'metaverse’ to come in as a runner-up to ‘Goblin mode’ for the word of the year in...

Matt Hancock accused of rewriting history in pandemic book

Matt Hancock has been accused of rewriting history as he seeks to rescue his reputation with the launch of a book about helping...

The Super Mario Bros. Movie actually looks awesome | Digital Trends

The latest trailer for The Super Mario Bros. Movie has reignited hype for the animated blockbuster and then some. Featuring a plethora of...

Justin Verlander, Mets agree to two-year, $86 million deal: report

The New York Mets have reportedly reached a deal with AL Cy Young Award winner Justin Verlander. Days after reportedly meeting with the team...

Recent Comments