Regulators are tightening their supervision of the cryptocurrency market as a result of the collapse of the FTX cryptocurrency exchange.
The FTX fiasco is having an impact on the cryptocurrency market and finance in general.
Everyone was astonished by the collapse of this cryptocurrency exchange, which had a value of $32 billion in February.
On November 11, FTX filed for Chapter 11 bankruptcy because it ran out of funds to meet the demands of its terrified consumers. As a result, regulators have started the investigation into Sam Bankman-Fried, the founder of FTX.
Additionally, regulators are paying more attention to the cryptocurrency industry, where openness is virtually nonexistent.
The Singapore market regulator has recently declared that it is investigating Binance, the world’s largest cryptocurrency exchange by volume. Binance agreed to buy FTX on November 8, but withdrew its bid the next day.
Binance is suspected of breaking payment service guidelines.
The Commercial Affairs Department has begun an inquiry into Binance for possible violations of the Payment Services Act, the Monetary Authority of Singapore announced in a statement on Nov. 21.
The probe was revealed by the regulator in response to inquiries about whether it treated Binance.com differently than FTX.
Complaints Regarding Binance
Although neither Binance nor FTX have local licenses, the two clearly vary, the monetary authorities claimed. While FTX did not actively seek users in Singapore, Binance did. Binance actually went as far as to provide listings in Singapore dollars.
The Singaporean authorities’ probe comes as Binance CEO Changpeng Zhao emerges as the new king of cryptocurrencies following the downfall of Bankman-Fried.
Zhao made a notable announcement on the establishment of a fund to assist cryptocurrency companies that might experience cash flow issues as a result of their exposure to FTX. He still hasn’t given the specifics regarding this money.
Between January and August 2021, according to the regulator, Binance was the subject of a number of complaints. Additionally, during that time, Binance’s unlicensed consumer solicitation was reported in a number of jurisdictions.
There was no evidence that FTX was specifically searching for Singaporean users. Singapore dollars could not be used to make trades on FTX. However, Singaporeans were able to use FTX services online, just as they could with the thousands of other financial and cryptocurrency companies that run their operations abroad.”
The financial regulator charged Binance for soliciting Singaporean users without a permit.
Binance Stresses Privacy
It stated that Binance has to avoid luring users from Singapore. As a result, the business implemented a number of controls, such as geo-blocking Singapore IP addresses and removing its mobile app from Singapore app stores.
These techniques were designed to prove beyond a shadow of a doubt that Binance had stopped soliciting and offering services to Singapore users. If Binance decides to remove some of these restrictions today, it must continue to follow the prohibition on soliciting Singapore users without a license.
Binance chose not to respond. A spokeswoman told, Due to confidentiality restrictions, they are unable to comment on this.
The probe is not specifically tied to FTX, but it demonstrates the pressure regulators are applying to the cryptocurrency industry as scandals mount, resulting in enormous losses for small and major investors alike.
Sister cryptocurrencies TerraUSD and Luna failed in May of last year, wiping out at least $55 billion. The credit crisis brought on by that crash resulted in the closure of the hedge fund Three Arrows Capital, or 3AC, as well as the insolvency of several cryptocurrency lenders, including Celsius Network and Voyager Digital.
