One of the world’s largest crypto exchanges, Binance, is facing extreme pressure from the Monetary Authority of Singapore (MAS) for flouting regulation rules.
MAS is the latest major regulator to float Binance financial misconducts on the news again, and for the wrong reasons.
On Thursday, Singapore’s watchdog warned consumers that the international crypto exchange is no longer licensed or regulated to offer or solicit digital payment services.
In other words, MAS placed Binance on an “investor alert list”.
The crypto exchange is also facing growing pressure from other regulators in far-off countries — including the UK, Europe, and Japan — over compliance.
Facing challenges in overseeing Binance
The real kicker is that Binance has no official headquarters. Instead, it runs as an online crypto exchange — with a global complex web of corporate entities.
That explains why MAS and other major financial regulators find it difficult to oversee Binance’s financial activities.
Ironically, Binance CEO, Changpeng Zhao, lives in Singapore.
Binance is accused of breaching Singapore’s Payment Services Act — for providing and soliciting crypto payment services without a license whatsoever.
The gigantic crypto company promised to work alongside MAS to iron out their differences and comply with Singapore’s regulation laws before providing required services to consumers.
Binance moves to improve its standing in Singapore
In a desperate move to boost their standing with Singapore, Binance appointed a former MAS executive, Richard Teng, as CEO of Binance Singapore.
Zhao hailed the appointment as a “major step” in becoming a global “leader in regulatory compliance”. So far, Binance has been granted a transitional exemption to serve investors (both local and international) after applying for a license.
Besides instructing the crypto exchange to abide by the law, the licensing framework puts a cap on their transaction sizes. And monitors 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. The review process is meant to observe whether Binance can indeed meet the said requirements under the Payment Services Act — and not breach them in the future.
That said, MAS is still advising retail investors to shun doing any crypto business with the local arm of Binance “until the license application process is approved”.
Binance has been quick to retaliate that MAS actions don’t directly affect the services the arm of Binance.com provides in Singapore. They claim the local arm was a separate legal business.
