The list of countries researching stock exchange giant Binance is growing as Binance is scrutinized in Singapore and the Cayman Islands as well.

Binance is also being scrutinized in Singapore and the Cayman Islands

Over the past few weeks, the Binance exchange has been criticized by regulators in the UK, US, Japan and Germany, while earlier this week UK users complained about issues with using the card, while the Binance Platform later confirmed the problem was fixed. In addition, the company has stopped offering its services to users in Ontario.

But the company’s problems appear to have worsened after Singapore authorities said they had taken note of developments elsewhere and intended to follow suit.

According to the Monetary Authority of Singapore (MAS), the country’s central bank and financial regulator, said:

“We are aware of the measures taken by other regulatory authorities against Binance and will monitor them if necessary.”

The MAS also confirmed that Binance Asia Services, a country-based company, is part of a group of exchanges that will operate as usual with their luck during the renewal. The regulator will allow companies in this group to operate as normal while reviewing applications for operating licenses.

According to the MAS document, Binance Asia Services, along with stock market rivals such as Gemini and Bitstamp, has expressed interest in “providing digital payment tokenization services”.

However, Binance confirmed to the media that Binance Asia Services “is a separate legal entity and does not offer any products or services through the Binance.com or Binance Markets website”. Instead, Singapore-based Binance claims to be “focused on building the local blockchain ecosystem and taking care of users” in Singapore.

The exchange found:

“It is important to note that we take a cooperative approach to dealing with regulators and that we take our compliance obligations very seriously. We actively adhere to the changing guidelines, rules and laws in this new space. “

Meanwhile, the MAS states that it uses “strong standards” in its review process and the exchanges promise “to be scrutinized and reviewed during the licensing process”.

Similarly, the Cayman Islands Monetary Authority (CIMA) has issued a public warning to Binance in the Caymans. Obviously saddened by some media claims that Binance is based in the Caymans, CIMA wrote:

“We would like to inform the public that Binance, Binance Group and Binance Holdings Limited have not been registered, licensed, regulated or authorized by any government agency to operate a cryptocurrency exchange from or within the islands. Cayman.”

Operators of cryptocurrency exchanges have to register with CIMA according to a law passed last year.

“CIMA is currently investigating whether Binance, Binance Group, Binance Holdings Limited or any other company affiliated with this group of companies has activities in or from the Cayman Islands that may be covered by our regulatory oversight,” the agency said .

The regulators in the Caymans have come under pressure from economic powers to abolish their status as “tax haven”. The country was removed from the European Union’s blacklist last October – and seems keen not to make a quick comeback.

Cryptocurrency regulation in Singapore and Cayman

In Singapore, cryptocurrency exchanges and transactions are legal and the city-state has taken a friendlier stance on this matter than some of its neighbors in the region. Although cryptocurrencies are not legal tender, Singapore’s tax authority regards Bitcoin as a “commodity” and therefore levies a goods and services tax (Singapore’s version of VAT). The Monetary Authority of Singapore (MAS) has taken a neutral stance on the development of cryptocurrencies: In 2017, the agency made it clear that, although it does not aim to regulate virtual currencies, it will regulate digital payment tokens (DPT) if these tokens are called “securities” classified. Although it has so far taken a practical approach, in 2020 the MAS warned the public about the risks of investing in crypto products.

The generally soft approach of the MAS in regulating cryptocurrency exchanges has resulted in them adopting existing regulatory frameworks whenever possible. In January 2018, the MAS issued a press release warning the public of the risks of speculating in cryptocurrencies, while Deputy Prime Minister Tharman Shanmugaratnam stated that cryptocurrencies are subject to AML and CFT measures like traditional fiat currencies. A year later, the Payment Services Act 2019 (PSA) was passed, bringing exchanges and other crypto companies into the MAS from January 2020 and requiring them to obtain a license.

The Cayman Islands have also given favorable financial terms to crypto companies, which are often shunned elsewhere due to the AML risks they pose. For largely unregulated companies such as Initial Coin Offerings (ICOs) and cryptocurrency exchanges, the Cayman Islands Special Economic Zone makes it easier to register a physical address and hire employees in the Cayman Islands.

Under Cayman Law, a virtual asset like Bitcoin is defined as a digital representation of value that can be electronically traded and used for investment purposes.

Pending the announcement and approval of new bills, there are no existing or even proposed laws in the Cayman Islands to interfere with the legislation and regulation of crypto assets and the companies and products that make up the industry, such as Initial Coin Offerings (ICOs) Token Offerings (STOs) or Virtual Asset Service Providers (VASPs) such as stock exchanges and investment companies.

Led by the VASP Act, these regulatory updates introduced three important new requirements for Cayman crypto asset service providers: registering as a VASP and / or registering for a Translator License Virtual Asset Service or a sandbox license:

The VASP bill aims to create a new regulatory framework for regulating digital assets like bitcoin. The newly passed law requires that VASPs such as cryptocurrency exchanges (both centralized and decentralized) and custodians be registered and licensed in the Cayman Islands. The VASP bill, along with four other bills, proposes amending existing Caribbean securities and stock exchange laws, as well as creating a regulatory sandbox that would help facilitate the adoption of advanced Cayman technology and provide financial services.

In the US, Binance is under investigation by the US Department of Justice, the Internal Revenue Service and the Commodity Futures Trading Commission. Federal authorities officially accuse Binance of no wrongdoing.

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