6. Foreign and Unregulated Providers: Know Who You’re Dealing With

Global access is one of the benefits of crypto trading. Yet with that access comes a wide range of platforms that operate outside of Singapore’s regulatory environment. While many foreign exchanges appear legitimate and even well-funded, their accountability may be unclear.

In the event of disputes, technical issues, or platform failures, investors may find it difficult to seek redress. Different countries have different laws as we have mentioned above, and unregulated providers may not have to follow the same standards of safeguarding, security, or accountability as we do here in Singapore. While any funds withdrawn off our platform will be outside of our control, if you do decide to withdraw your DPT to a DPT service provider or wallet in another jurisdiction where such regulatory oversight is weak, you may not have any avenue for recourse.

A good example that we can consider is the FTX incident. FTX was a major cryptocurrency exchange founded in 2019 by Sam Bankman-Fried (SBF). It quickly became one of the biggest platforms for trading crypto assets like Bitcoin (BTC), offering features like:

• Spot trading
• Futures and leveraged tokens
• Staking and lending
• NFTs and DeFi integrations
  
  

However, in November 2022, FTX collapsed after revelations of mismanagement and the misuse of customer funds. Billions of dollars were lost, leading to:

• Bankruptcy filings for FTX and over 100 affiliated companies
• Arrest and conviction of founder Sam Bankman-Fried for fraud and conspiracy

Massive market events like above significantly impact on crypto prices and investor confidence, including for assets such as Bitcoin. 

At Coinut, we operate under the regulatory oversight of the Monetary Authority of Singapore under the Payment Services Act, subject to scrutiny and held to specific standards when it comes to security, compliance, and consumer protection – as a means to ensure that your best interests are prioritised.

Engaging with a regulated provider adds a layer of reassurance that the company is committed to putting proper systems in place to protect your interests.