Binance Offers Limited Services After Singapore Central Bank’s Restrictions

Binance restricts its services in Singapore days after the Monetary Authority of Singapore placed Binance on its ‘Investor Alert List.’

By
Chung Yee
on
September 6, 2021
Category:
BSC News

Ending Payment Option in SGD

Singapore’s financial watchdog placed an ‘Investor Alert List’ on Binance on September 2, prompting Binance to remove its SGD trading pairs. The Monetary Authority of Singapore (MAS) cited breaches of the Payment Services Act (PSA) by providing payment services to and soliciting business from Singaporeans for its actions.  

Changpeng Zhao (CZ), the Chief Executive Officer (CEO) of Binance, immediately sought to remove the SGD trading pair and reiterated that Binance is not operating in Singapore. Binance Singapore is an affiliate of Binance that is independently incorporated and operates within the country. 

Binance Singapore’s PSA license application is ongoing, but the company is currently operating under exemption. In a follow-up thread, CZ also indicated that there might be more restrictions coming to Singapore users depending on the conditions imposed by MAS. MAS is Singapore’s central bank and integrated financial regulator.

The regulator’s decision to reprimand Binance for flouting its regulation came as no surprise as it has been closely monitoring Binance Holdings Limited, the owner of the Binance crypto exchange. In its effort to remain compliant, Binance has engaged the services of Richard Teng, a former regulator, to head Binance Singapore. 

Source: Binance took immediate action to remove SGD trading pairs after warning by the Monetary Authority of Singapore (MAS)

Long and Windy Road Ahead 

The regulatory clout on Binance has been building up over time and does not seem to be abating. Regulators in Japan, United Kingdom, and Malaysia have taken a similar stance against the top crypto exchange by issuing warnings to its citizens. The crypto industry in the past has not been taken seriously. Legislation requiring specific approvals for entities providing financial products and services has been in existence. It is the same regulatory framework that applies to banking and financial institutions. 

The adoption rate and the growth rate in the crypto market are the primary concerns regulators are trying to address. In a recent survey by CNBC, 1 in 10 Americans invests in cryptocurrency, and in Australia, it’s one in every six. Regulators worldwide must ensure that investors are protected, hence the increased scrutiny on institutions that provide crypto-related products and services. 

Source: Regulators are applying the same laws imposed on banking and financial institutions 

Silver Lining in Compliance

There are a few optimistic takes on the current events that are unfolding. Compliance within a regulated space is a recognition that crypto assets are fast becoming mainstream. At this stage, the industry invites the same regulatory scrutiny applied to banks, financial institutions, and other payment gateways.

Secondly, it also encourages wider adoption. As it becomes better regulated, the crypto space will see operators that fail to meet the requirements automatically ‘weeded out.’ There is more accountability and transparency in the industry. The safety of investors can be preserved, and in turn, this will drive further adoption. 

Crypto-Friendly Jurisdiction

Unlike other jurisdictions that do not welcome crypto-related companies, Singapore is one of the safest bets for proper compliance. It has a comprehensive framework and a policy that favors digital innovation. It recently granted a digital token payment license to FOMO Pay. While Binance Singapore’s license application is still pending, steps must be taken to ensure that any potential infringements are removed and addressed. 

Setting up local entities for regulatory compliance is preferred, but Binance is not precluded from participating through local licensed crypto exchanges, just like what it did in Indonesia through Tokocrypto

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Chung Yee

Chung Yee has a legal background and has been involved in research works for the legal and compliance industry. Writing is his passion, centered on topics such as the blockchain and finance.

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