how will the latest crypto crackdown affect S’pore users

Singapore’s central bank said last week that it would “follow up” with popular crypto trading platform Binance, if applicable.

This is in light of actions taken by other regulators. Britain, for example, has banned the company from carrying out regulated activities there.

On Thursday, July 7, Binance stepped forward and said it is committed to working with regulators and putting systems in place to protect user interests.

In a letter posted to the company’s website, Binance Founder and CEO Zhao Changpeng acknowledged the need to develop formal guidelines to prevent the misuse of cryptocurrencies around the world.

Zhao Changpeng, CEO of Binance
Zhao said he will work with global regulators and protect users / Image credit: Binance

He said more regulations are, in fact, positive signs that the industry is maturing.

The Singaporean branch of Binance is called Binance Asia Services. It operates the platform and is well known to Singaporeans trading bitcoin and several other cryptocurrencies.

We take a look at why Binance is under regulatory review and how it may impact consumers here.

What is Binance and what does it do?

Binance is one of the world’s largest exchanges in the crypto industry.

Its crypto exchange allows users to trade cryptocurrencies directly with each other. Binance offers a wide range of services for users around the world, from spot crypto and derivatives trading to tokenized versions of stocks.

binance team
A Binance team photo / Image credit: Binance

Binance’s trading volumes reached $ 662 billion last month, nearly ten times higher than in July of last year, according to data from CryptoCompare. According to Glassdoor, the company has grown to achieve annual revenue of nearly $ 1 billion.

Its own cryptocurrency, Binance Coin, is the fourth largest in the world in terms of market capitalization.

Binance Coin, has only traded at S $ 20 levels in the past, not before the crypto hype in March that pushed its token to a record high of S $ 915. It is currently hovering around S $ 430 after the recent crackdown on crypto in China.

binance money price
Binance Coin is the world’s fourth largest crypto in terms of transaction volume / Image credit: Coinbase

Binance’s corporate structure is said to be opaque, with its holding company largely registered in the Cayman Islands. Her company’s website says she has more than 2,000 employees at more than 20 locations around the world.

Is Binance Legal in Singapore?

Binance launched its crypto exchange in Singapore in 2019, allowing users to buy and sell crypto assets like Bitcoin using the Singapore dollar through the Fast and Secure Electronic Funds Transfer (FAST) system.

The Singaporean branch of Binance was officially launched the same year. Called Binance Asia Services, it is backed by the unit of Temasek Vertex Holdings.

singapore binance blockchain week 2019
Binance CEO Zhao Changpeng at the company’s 2019 blockchain event / Image credit: Binance

According to the Monetary Authority of Singapore, Binance Asia Services is exempt from holding a license under the Payment Services Act to provide digital payment token services. It was then that his license application was being examined.

The company has established its presence in Singapore. Its local address is registered at Guoco Tower, 1 Wallich Street. It is located in Tanjong Pagar, the central district of downtown Singapore.

When Vulcan Post performed a check on its career page, it showed that the company is currently actively recruiting over 50 positions for its Singapore office.

Why are regulators reporting this?

Binance has come under intense scrutiny from global regulators in recent months. The most significant regulatory fight has been Britain banning the company from carrying out regulated activities there.

This is due to the growing popularity of the crypto exchange in Britain. Its app has been downloaded 1.8 million times this year and 2.2 million times in total, according to mobile data company Sensor Tower.

This is no surprise as Binance has built itself a huge success around the world, as shown by its Telegram channels for users in over 30 countries.

The UK Financial Conduct Authority had said the UK branch of the stock exchange could not conduct any regulated activity, but provided no explanation. Britain does not generally regulate crypto trading, with the exception of certain activities like crypto derivatives.

bitcoin binance
The company pledges to work with regulators / Image credit: Reuters

The company has also been surveyed by various regulators and government agencies like Germany and Japan.

The Japanese regulator said last month that Binance was operating illegally in the country, while the German watchdog said in April it was facing a fine for offering tokens linked to stocks.

Regulators are said to be concerned about the quality of anti-money laundering controls in crypto exchanges and the risks that crypto trading poses to consumers. Therefore, big players entering new jurisdictions, like Binance, are facing the heat.

Is that going to get into regulatory issues here?

Binance has stated that it takes its compliance obligations very seriously and is committed to meeting all regulatory requirements wherever it operates.

In a note to Binance users posted on its website earlier this week, Zhao said the company intends to continue its collaborative efforts with regulators to address their concerns amid the growing industry. cryptography.

binance application
The Binance app / Image credit: Bloomberg

Zhao said the company responded this year to some 5,600 inquiries from law enforcement agencies around the world to tackle cybercrimes such as money laundering, scams and financing. terrorism.

Based on Zhao’s latest claim, Binance appears to be ready to cooperate with regulators.

The CEO added that the company is strengthening its international compliance team to provide “high-level advice” and plans to double the size of the team by the end of the year.

He commented that properly laying the groundwork for cryptography rules will make the entire population feel secure in participating in cryptography. By being cooperative, it will benefit the crypto industry as it allows openness to the mass market, he noted.

“I believe that a well-developed long-term legal and regulatory framework will provide a solid foundation that will truly make crypto essential in everyone’s daily life,” he said, adding that clarifying and building the first set standards are essential for the continuation of the industry. growth.

Cryptocurrency and blockchain technology is a key content pillar for Vulcan Post. You can find the rest of our cryptocurrency coverage here.

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Featured Image Credit: BBC

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