I would like to point out a clear issue in the Monetary Authority of Singapore’s recent statement on FTX and Its Investor Alert List (IAL).
As MAS explained, Singapore cannot require FTX to ringfence its Singaporean customers’ funds because FTX is a foreign entity and not licensed in Singapore.
Furthermore, FTX did not actively solicit Singaporean users, so it was not placed on the MAS’ IAL.
However, FTX does have a Singapore-registered subsidiary, Quoine PTE LTD.
This company has received an exemption for a MAS license and has been actively soliciting Singaporean users.
In fact, Quoine allows Singaporean users to register using their SingPass.
Despite this active solicitation of Singaporean users, Quoine was not on the IAL.
Quoine has recently halted withdrawal on its Liquid exchange platform, blaming FTX’s bankruptcy in the United States.
How is this legal? Shouldn’t Quoine be required to ringfence its Singaporean customers’ funds as a condition for its MAS license application?
In a press release on 14 November, MAS notes that Quoine Pte. Ltd (Quoine) – which operates the Liquid exchange in Singapore – is currently exempt from licensing while its licence application is under review. MAS is carefully reviewing the application, taking into account recent developments.
It said that the funds of Singapore investors in FTX.com are not parked under Quoine as FTX.com and Quoine operate as separate legal entities.
Singapore users have the choice to deal with either FTX.com or Quoine.
MAS has not required FTX.com to migrate Singapore users to Quoine.
There was no mention of ringfencing of Quoine’s funds by MAS in its press release on 14 November.
TOC had tried to sign up via Singpass on the Liquid trading platform but was led to a broken URL after logging in. However, Simon points out that a family member was able to sign up using Singpass 3 days after the Liquid trading halted withdrawal.