Binance acquires stake in HGX as it seeks to clear regulatory hurdles
Binance, the embattled crypto exchange which continues to do good business around the world, has announced that it has acquired 18% in the Singapore-based private securities exchange, Hg Exchange (HGX).
Though the details of the deal have not yet been made public, it can be safely assumed that one of the main purposes of acquiring a stake in the exchange is the fact that HGX had recently acquired a market operation license from the Monetary Authority of Singapore.
Binance Share of Problems
Binance has been having its share of its problems in Singapore and was recently forced to shut down its operations in the region as the MAS had come down hard on the exchange as it did not have any regulatory license to carry on with its operations in the country. This had forced the exchange to contemplate leaving the region completely but it seems to have had a change of heart.
“Crypto and traditional financial offerings continue to converge. Through this investment, we seek to work with HGX in enhancing offerings of products and services supported by blockchain technology,” said Richard Teng, chief executive, Binance Singapore.
Importance of Singapore
Singapore and the presence there, for a fintech company like Binance, is key as it is one of the financial capitals of Asia whose crypto regulations are likely to become the most relaxed in the Asian region in due course of time. This was probably weighing on the leadership team of Binance which is why they chose to stay back in Singapore and look for ways to restart their operations pretty quickly and this stake acquisition is likely to pave the way for that shortly. It is also interesting to note that Teng was the Chairman at HGX before he took over as the Head of Binance Singapore and it would have certainly helped to smoothen the negotiations between the two exchanges.
Now with this new foothold in the region, it would be interesting to see how Binance would be approaching the operations and the licensing issues that it has been faced with. Its priority is likely to be to start the operations in the country as soon as it can so that it would help it to regain confidence from the users not only in Singapore but in other parts of Asia as well as it looks to assure the investors and traders that it is here to stay for the long run and these regulatory issues are just a small blip in its path.
