Lawrence Wong – Deputy Prime Minister of Singapore – said major local financial institutions have “insignificant” exposure to cryptocurrencies and digital asset companies.
As such, the gigantic crash of FTX earlier this month is likely to have a minor impact on the domestic financial network, he added.
The FTX crisis has caused substantial investor losses and created massive turbulence in the entire crypto industry.
Singapore’s Deputy Prime Minister – Lawrence Wong – stated that its consequences should not be that bad for the city-state’s economy. He added that most big domestic monetary institutions have not jumped on the crypto bandwagon, preventing them from registering losses during the latest market plunge.
Wong – who also serves as Finance Minister – said the authorities are unaware of the exact number of Singaporean retail investors on FTX since the platform was not registered in the country.
“Unfortunately, those who invested in cryptocurrencies through FTX’s global platform would have lost money,” he said.
He disclosed that Singapore’s top financial regulator – the MAS – intends to launch a program that could alert retail customers about the risks in the field. The watchdog has been “warning since 2017 that dealing in cryptocurrencies is hazardous and recent events have underscored these hazards,” the politician added.
The Minister said the MAS did not place FTX on its investor alert list since there was no evidence the venue was attracting clients in Singapore.
“This does not mean that all entities which are not listed on the (investor alert list) are safe to deal with. MAS cannot possibly provide an exhaustive list of all the unsafe or unlicensed entities that exist in the world,” Wong explained.
Subsequently, he argued that digital assets are “highly volatile and have no intrinsic value.” In his view, crypto exchanges can collapse due to unsustainable business models or fraud, and FTX will not be the last example.
Wong warned consumers to be utterly careful when delving into the industry and be ready to “lose all their value.”
One such Singaporean entity to report multi-million losses due to its exposure to SBF’s troubled exchange is Temasek. The Singaporean state holding company owned by the local government allocated $210 million in FTX International and $65 million in FTX US. The crash of the former crypto giant shrunk that investment to virtually zero.
Singapore’s Minister of Finance said Temasek suffered financial loss and “reputational damage” due to its involvement with FTX.
“What is important is that our investment entities take lessons from each failure and success and continue to take well-judged risks in order to achieve good overall returns in the long term,” he concluded.
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