FTX Collapse: Binance, Largest Crypto Exchange, Is Under Investigation

The bankruptcy of the FTX cryptocurrency exchange is pushing regulators to increase their scrutiny of the crypto space.

The FTX cryptocurrency exchange's insolvency has regulators scrutinising the crypto industry.
OLINGA LUC

The FTX issue is affecting crypto and finance.

The $32 billion crypto exchange collapsed in February.

FTX declared Chapter 11 bankruptcy on Nov. 11 after running out of cash to meet client demands. Regulators have opened investigations into Sam Bankman-crypto Fried's enterprise.

Regulators are also scrutinising the opaque crypto space.

Singapore's market authorities is investigating Binance, the world's largest cryptocurrency exchange. Binance agreed to buy FTX on Nov. 8, then backed out the next day.

Binance allegedly broke payment rules.

The Monetary Authority of Singapore claimed on Nov. 21 that Binance may have violated the Payment Services Act.

The regulator revealed the inquiry when asked if it treated Binance.com differently than FTX.

Binance Gripes
"Both Binance and FTX are unlicensed, but there's a difference," the monetary authority said. "Binance actively recruited Singapore users while FTX didn't. Binance offered SGD listings."

Changpeng Zhao, CEO of Binance, is the new cryptocurrency monarch after Bankman-fall. Fried's

Zhao announced the launch of a fund to support crypto firms with FTX exposure. He hasn't explained the fund.

Between January and August 2021, the regulator received many Binance complaints. Binance was accused of unlicensed customer solicitation in various jurisdictions.

"FTX didn't appear to target Singaporeans. FTX didn't allow Singapore dollar trades. Singaporeans could access FTX online, like thousands of other financial and crypto companies."

Binance was accused of soliciting Singapore users without a licence.

Binance's Confidentiality
It told Binance to cease targeting Singaporeans. The corporation blocked Singapore IP addresses and removed its mobile app from Singapore app shops.

"These procedures were meant to prove Binance has stopped courting Singapore users. Binance must continue to comply with the ban on courting Singapore users without a licence if it removes any restrictions."

Binance was silent. TheStreet: "Due of confidentiality restrictions, we can't comment."

The probe is unrelated to FTX, but it shows the pressure regulators are putting on the crypto business as scandals increase, inflicting retail and major investors massive losses.

Luna and UST, or TerraUSD, collapsed in May, erasing $55 billion. This rout prompted a financial shortage that led to the dissolution of 3AC and the bankruptcies of Celsius Network and Voyager Digital.