One of the largest crypto exchanges in the world Binance is under extreme pressure from the Monetary Authority of Singapore (MAS) for flouting regulatory rules.
MAS is the latest major regulator to bring Binance’s financial misdeeds back into the headlines – and for all the wrong reasons.
On Thursday, Singapore’s regulator warned consumers that the international crypto exchange is no longer licensed or regulated. As such, it is not allowed to offer or solicit digital payment services.
In other words, the MAS placed Binance on a “warning list for investors.”
The crypto exchange is also under growing pressure from other regulators in far-flung countries – including the U.K., Europe, and Japan – for compliance.
Find more details about Binance and why it is on the warning list for investors in Singapore, with our companion app. The business news mobile app Born2Invest will keep you up to date with the latest financial news in the world.
Challenges in overseeing Binance
The real sticking point is that Binance has no official headquarters. Instead, it operates as an online crypto exchange – with a global, complex network of corporate entities.
This explains why MAS and other major financial regulators find it difficult to monitor Binance’s financial activities.
Ironically, Binance CEO Changpeng Zhao lives in Singapore.
Binance is accused of violating Singapore’s Payment Services Act. The company offers crypto payment services without any license. The giant crypto company promised to work with MAS and iron out the differences. The exchange wants to comply with Singapore’s regulatory laws before offering the required services to consumers.
Binance is trying to improve its standing in Singapore
In a desperate attempt to improve its standing in Singapore, Binance appointed former MAS executive Richard Teng as CEO of Binance Singapore.
Zhao praised the appointment as an “important step” in becoming a global “leader in regulatory compliance.” Previously, Binance was granted a temporary exemption to serve investors (both local and international). This happened after the company applied for a license.
In addition to instructing the crypto exchange to comply with the law, the licensing framework sets a cap on their transaction sizes. It also monitors them for any money laundering activities. The laws apply to all crypto exchanges and companies.
The country’s regulator is still reviewing the company’s license application. This is to determine whether Binance can actually meet the aforementioned Payment Services Act requirements – and not violate them in the future.
Nevertheless, the MAS advises retail investors not to conduct crypto transactions with Binance’s local arm “until the license application is approved.”
Binance has been quick to counter that the MAS’ actions do not directly affect the services offered by Binance.com’s Singapore arm. They claim the local branch is a separate legal business.
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First published in CRYPTO MONDAY, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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