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The Monetary Authority of Singapore has said Binance may have breached local regulation, making the city state the latest global regulator to crack down on the international crypto exchange.
Singapore’s central bank and financial regulator on Thursday placed the company’s global website binance.com on an “investor alert list” to “warn consumers in Singapore that Binance is not regulated or licensed in Singapore to provide any payment services”.
The free-trading entrepôt is a crucial jurisdiction for Binance, one of the world’s largest crypto exchanges and its warning comes as the company faces growing pressure from regulators in Japan, Europe and the UK over compliance.
Although the exchange does not have a formal headquarters, its chief executive Changpeng Zhao is based in Singapore, the company said.
MAS alongside other major financial regulators faces a challenge in overseeing Binance, which operates both a global online crypto exchange and a complex network of corporate entities in several countries.
Mas said that after reviewing binance.com’s operations it is “of the view that Binance, which operates the website, may be in breach” of Singapore’s Payment Services Act for providing payment services and soliciting business from Singapore residents without a licence.
Binance said it would “work closely with MAS and other global regulators to comply with the relevant regulatory standards and facilitate any required service changes”.
The UK’s Financial Conduct Authority last week said that it is “not capable” of properly supervising Binance despite the “significant risk to consumers” posed by its “complex and high-risk financial products”. The regulator said Binance’s UK affiliate had “failed to” respond to some of its basic queries, making it impossible to oversee the sprawling group.
The warning from MAS comes a week after Binance moved to boost its standing in Singapore by appointing Richard Teng, a former MAS executive and past CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market, as chief executive of Binance Singapore.
Zhao, who has promised to make Binance compliant with regulations worldwide, said the appointment was a “big step” in the direction of becoming a “leader in regulatory compliance”.
Binance’s local entity in Singapore, Binance Asia Services, has applied for a licence under the city state’s regulation and has been granted a transitional exemption to serve both local retail and international investors.
The licence framework, which effectively covers all crypto businesses and exchanges, means they must obey strict rules including limits on transaction sizes and are subject to anti-money laundering measures.
MAS said it was reviewing Binance Singapore’s application but that the local unit must stop any transfers of assets between itself and Binance.com.
“BAS’ licence application remains under review, subject to it demonstrating that it is able to meet requirements under the [Payment Services Act],” the MAS said.
Binance said the warning about binance.com “has no direct impact on the services provided on Binance Singapore” and that the local unit was a separate legal entity.
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