The Central Bank of Singapore said last week that it would “Follow” the popular crypto trading platform Binance on demand.
This is in light of the actions taken by other regulators. For example, Britain has banned companies from carrying out regulated activities there.
On Thursday (July 7), Binance stepped forward and said he did committed to work with regulators and the establishment of a system to protect the interests of users.
In a letter posted on the company’s website, Binance founder and CEO Zhao Changpeng recognized the need to develop formal guidelines to prevent the misuse of cryptocurrencies globally.
He said more regulation is actually a positive sign that the industry is maturing.
Binance’s Singapore branch is called Binance Asia Services. He manages the Binance.sg platform and is well known among Singaporeans who trade bitcoins and several other cryptocurrencies.
We look at why Binance is facing regulatory control and how it may affect consumers here.
What is Binance and what does it do?
Binance is one of the world’s largest stock exchanges in the crypto industry.
Its crypto exchange allows users to trade cryptocurrencies directly with each other. Binance offers a wide range of services to customers around the world, from cryptocurrencies and derivatives trading to tokenized versions of stocks.
Last month, Binance’s trade volume reached $ 662 billion, nearly ten times more than in July last year, CryptoCompare data show. According to Glassdoor, the company has grown to reach annual income of nearly a billion US dollars.
Its own cryptocurrency, Binance Coin, is the fourth largest in the world by market capitalization.
Binance Coin, traded in the past around only 20 S $, only until the crypto hype in March, due to which his token grew to the highest level of 915 S $. It is currently hovering around $ 430 per piece Chinese recent cryptological attack.
Binance’s corporate structure is said to be opaque, and its holding company is widely registered in the Cayman Islands. The company’s website states that it has over 2,000 employees in more than 20 locations around the world.
Is Binance legal in Singapore?
Binance launched its Singapore crypto exchange in 2019, allowing users to buy and sell crypto assets like Bitcoin using the Singapore dollar through fast and secure transfers (FAST) electronic funds transfer system.
Binance’s Singapore branch was officially launched the same year. Named Binance Asia Services, it is backed by Temasek’s Vertex Holdings unit.
According to the Monetary Authority of Singapore, Binance Asia Services is exempted from holding a license under the Payment Services Act to provide digital payment token services. This is while the license application is being reviewed.
The company has established its presence in Singapore. Its local address is registered as Guoco Tower, at Wallich 1. It is located in Tanjong Pagaru, the center of Singapore’s city district.
When Vulcan Post conducted a check on his career page, he showed that the company is current active employment more than 50 roles for his Singapore office.
Why do regulators mean it?
Binance has faced strict oversight by global regulators in recent months. The most prominent regulatory struggle was Britain banning the company from performing regulated activities there.
This is due to the growing popularity of crypto exchanges in Britain. Its application has been downloaded 1.8 million times this year, and a total of 2.2 million times, according to mobile data company Sensor Tower.
This is not surprising as Binance has created a large number of followers globally, as seen by its Telegram channels for users in more than 30 countries.
The British Financial Conduct Authority said that the British branch of that stock exchange could not perform any regulated activities, but did not provide an explanation. Britain generally does not regulate crypto trading, except for some activities such as crypto derivatives.
The company has also been questioned by various regulators and government agencies such as Germany and Japan.
The Japanese regulator said last month that Binance was operating illegally in the country, while the German supervisory authority said in April that it risked being penalized for offering stock-related tokens.
It is said to be regulators are concerned through standards of checks against money laundering on crypto exchanges and the risks that crypto trading poses to consumers. Therefore, larger players entering new jurisdictions, such as Binance, are facing heat.
Will it get into regulatory issues here?
Binance said he takes his compliance obligations very seriously and is committed to complying with all regulatory requirements wherever it operates.
In a note for Binance users posted on their website earlier this week, Zhao said the company intends to continue efforts to work with regulators to meet their problems amid a growing crypto industry.
Zhao said the firm has helped about 5,600 law enforcement agencies’ investigative requests around the world this year to combat cybercrime such as money laundering, fraud and terrorist financing.
Based on Zhao’s latest confirmation, Binance seems ready to cooperate with regulators.
The CEO added that the company is strengthening its international compliance team to provide “high-level guidance” and plans to double the size of the team by the end of the year.
He commented that properly laying the groundwork for crypto rules will allow the general population to feel safe to participate in crypto. By cooperating, it will benefit the crypto industry because it enables the opening of the mass market, he noted.
“I believe that a well-developed legal and regulatory framework will be a solid foundation in the long run that truly makes cryptocurrencies crucial in everyone’s daily lives,” he said, adding that clarifying and building the first set of standards is crucial for industry growth.
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Credit for featured images: BBC