Binance ordered to halt operations in Singapore
Binance, the world’s largest cryptocurrency exchange, was placed on the Investor Alert List of Singapore’s financial regulator after the country’s central bank found it to be in breach of local laws.
The Monetary Authority of Singapore (MAS) on Thursday said Binance.com is offering payment services and soliciting business from the city-state’s residents without a proper licence.
The MAS further explains that it has reviewed the influential exchange’s operations and is of the view that its website “may be in breach of the Payment Services Act for carrying on the business of providing payment services to, and soliciting such business from Singapore residents without an appropriate licence.”
“Binance is required to cease providing payment services … to Singapore residents and cease soliciting such business from Singapore residents,” the regulator added.
The recent crackdown comes barely two weeks after Binance hired Richard Teng, the former chief regulatory officer of the Singapore Stock Exchange (SGX), to lead its Singapore operations. He joined the firm as the CEO of Binance Singapore, which operates under the domain Binance.sg, as part of its effort to court global regulatory bodies.
Teng led the regulation division at the SGX, where he was responsible for policy framework relating to listing, trading and clearing activities. Before that, he spent 13 years with the country’s watchdog as director of corporate finance. Most recently, he was the CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market.
Interestingly, the MAS warning didn’t include the domain name of Binance’s Singapore website. It only blacklisted the parent’s website, Binance.com.
Binance is facing a growing crackdown on multiple fronts and has been flagged by regulators in many jurisdictions. In the UK, Britain’s Financial Conduct Authority (FCA) restricted the exchange from carrying out regulated activities in the country. The City watchdog, however, has updated its previous warning to reflect that the UK division of Binance has complied with all the requirements imposed by the FCA.
The announcement comes as a blow to Binance’s efforts to comply with the regulators’ demands across the globe. The cryptocurrency exchange has recently shut down its futures and derivatives business across Europe, as well as Hong Kong, and Australia, as a “proactive” measure, according to Binance CEO Changpeng Zhao.
The Monetary Authority of Singapore (MAS) is updating its regulatory framework for crypto-related activities, including digital payments. The law cited in its statement, Payment Services Act (PSA), covers all crypto businesses and exchanges based in Singapore, bringing Binance and its peers under anti-money laundering and counterterrorist-financing rules.
The law imposes registration and customer due-to-diligence requirements that force operators to disclose their traders’ identities and report suspicious activity.
With the country thrashing its crypto regulation into shape, some crypto providers had no choice but to cease operations while the consequences upon related partners will likely be wide-reaching.
Singapore’s PSA law is similar to Europe’s Fifth European Anti-Money Laundering Directive (AMLD5), which went into effect earlier in 2020. The legislation was notable because it represents the EU’s first attempt to regulate cryptocurrency activities at EU-level expressly.