When it comes to crypto, there are three camps: the Crypto Bros, the staunchly anti-Crypto, and the “I can’t be bothered to understand this”.
And for all of them, the FTX collapse draws simply these two reactions: “I told you so” and “What?”
What Collapse?
One of the largest cryptocurrency exchanges in the world, FTX has made flashy headlines adorned with head-turning words like “scandal”, “lawsuit” and, most importantly, “bankruptcy”.
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In recent weeks, it has filed for bankruptcy with a Reuters report finding at least US$1 billion (S$1.4 billion) of client funds were missing at FTX. This has sent shockwaves in the crypto industry, sending bitcoin and other digital assets plummeting.
Consequently, FTX founder and former chief executive Sam Bankman-Fried said he had expanded the business too quickly and failed to notice red flags.
A tweet from him on Tuesday stated that his main goal was “to do right by customers” and that he was meeting with regulators for that.
Singapore’s Response
Deputy Prime Minister and Finance Minister Lawrence Wong was quick to use the collapse of FTX to further Singapore’s stance against crypto speculation and trading.
On Thursday at the Bloomberg New Economy Forum, he alluded to this collapse, saying that recent developments in the crypto market reinforced Singapore’s position that it was “on the right track” to “go big” on digital asset innovation while “not [being] open to crypto speculation at all”.
Additionally, he said that the collapse of FTX has raised “very serious allegations that amount to potential fraud”.
Basically, Singapore is okay to go digital with IT bros, but not okay to go crazy with crypto bros.
Singapore Against Crypto
And this isn’t new.
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Singapore has long held a strong stance against crypto. As Mr Wong said, “We need to take a strong stance against crypto speculation and trading, especially by retail investors.”
In fact, prior to the collapse of FTX, Singapore had issued a consultation paper on tightening regulatory rules on crypto trading and retail investors’ access to crypto.
You can watch this video to know more about the purposed rules:
Indeed, Singapore views crypto trading with an incredibly wary lens and intends to continue exploring tighter regulatory rules around it. The collapse of FTX will certainly serve as a cautionary tale and adds weight to Singapore’s position.
Mr Wong has said that Singapore “will review the rules that are necessary” but it will “continue to embrace innovation around digital assets which we think has tremendous potential”.
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