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.
The 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. This means 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 UK, Europe and Japan – over compliance.
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 the MAS and other major financial regulators find it difficult to monitor Binance’s financial activities.
Ironically, Binance’s 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 came after the company applied for a license.
In addition to instructing the crypto exchange to comply with the law hold, the licensing framework sets a cap on their transaction sizes. They are also monitored 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 comply with the aforementioned Payment Services Act requirements – and not violate them in the future.
Nevertheless, the MAS is advising retail investors not to make crypto trades 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 arm is a separate legal business.