The downfall of FTX continues to make waves throughout the industry, sending wake-up calls to regulators and politicians alike. Those against crypto have found a new reason to continue opposing this novel technology. On the contrary, those who support it are questioning their decisions after seeing billions of dollars lost in this catastrophic event.
The bulk of FTX’s impact has been absorbed by customers based in the West, but that has not stopped other countries from rethinking their approach towards crypto-regulations. The island nation of Singapore is now looking to ramp up regulations that will effectively restrict crypto-trading and speculation.
Controversial stance against crypto reinforced by FTX’s collapse
Lawrence Wong, the Deputy Prime Minister of Singapore and Minister of Finance, has taken cognizance of the turmoil caused by FTX’s fraudulent business activities. In an interview with Bloomberg, Wong cited this unfortunate event as part of the reason for reinforcing the island nation’s strong position against retail investors speculating and trading cryptocurrencies. He said,
“And we’ve said this for a long time, even when people criticized us for saying that, which was that we need to take a strong stance against crypto speculation and trading, especially by retail investors.”
Minister Wong clarified that Singapore is open for digital and digital asset innovation, but crypto-speculation is where the country draws the line. The minister agreed on the potential of blockchain technology in revolutionising cross-border payments, financial, and capital markets etc. However, exposing retail investors to crypto-speculation has been deemed risky for a while now.
Minister Wong revealed that Singapore has been looking to tighten the regulatory rules around crypto-trading and retail access to this market before the FTX saga unfolded. A consultation paper is in the works for the same. It will review regulations and rules for this industry.
Singapore Government lost $275 million in FTX
Between October 2021 and January 2022, Singapore-based Temasek Holdings Limited invested $210 million in FTX International and $65 million in FTX U.S for stakes of 1% and 1.5%, respectively.
On 17 November, Temasek, a state-backed investment agency, revealed that it would mark down this $275 million investment into FTX to 0.