Binance regulatory walls getting higher: Exchange halts Singapore products as South Africa issues fresh warning

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For years, Binance went about its business unbothered to comply with financial regulations, and very few regulators looked its way. Then, the exchange’s house of cards started crumbling under regulatory scrutiny in an increasingly growing number of countries. Singapore recently joined the long list of regulators going after Binance, banning it from providing payment services and placing it on the Investor Alert List. Elsewhere, South Africa has issued a warning against Binance, stating that the cryptocurrency exchange is not authorized to operate in the country.

The Financial Sector Conduct Authority in South Africa announced that the Binance Group “not authorized to give any financial advice or render any intermediary services in the country.”

#FSCAWarnings

The FSCA warns the public against an unauthorised entity called the Binance Group:

Full warning here: https://t.co/wzhYWq3vz0#TCF #ScamWatch #consumerprotection pic.twitter.com/CCga7i9pKc

— FSCA South Africa (@fscasouthafrica) September 3, 2021

According to the FSCA, Binance has been allowing South African residents to access its trading platform. This is despite the exchange not being authorized to provide any financial services. In addition, digital currencies are not regulated, and investors should be wary when dealing with Binance and other non-licensed platforms as they could lose all their money, the FSCA stated.

Some banks in South Africa have already started prohibiting transactions with Binance. As CoinGeek reported, Absa Bank barred its clients from purchasing digital currencies on Binance, claiming that it was non-compliant.

Singapore bans Binance, orders it to cease services

The Monetary Authority of Singapore (MAS), which is the central bank of the Southeast Asian nation, has also banned Binance.com from offering unlicensed payment services. In a statement, an MAS spokesperson claimed that after reviewing the exchange’s operations, it determined that it was in breach of the Payment Services Act. Binance has been providing payment services to Singaporeans and soliciting business from them without an appropriate license.

MAS has also placed Binance on the Investor Alert List to warn Singaporeans that it’s not regulated to serve them. It joins 699 other firms on the list which are not licensed to serve in the country but have given investors the impression that they are. The spokesperson added, “Binance is required to cease providing payment services which are regulated under the PS Act to Singapore residents and cease soliciting such business from Singapore residents.”

This has prompted the beleaguered exchange to announce that it would be ceasing Singapore dollar trading pairs and payment options, effective September 10. The company will also remove the Binance app from Singapore iOS and Google Play stores on that day as part of its bid “to remain compliant with local regulations.” Users are advised to complete all transactions and remove related trade advertisements by September 9 to avoid potential trading disputes.

Changes to #Binance Offerings in Singaporehttps://t.co/oKsgb8VFta

— Binance (@binance) September 5, 2021

Binance has been offering services to Singaporeans under Binance.sg, an exchange that’s operated by Binance Asia Services. BAS has submitted a license application to the central bank and is currently exempted from holding a license for the provision of digital payment token services, according to a report by the local financial daily Business Times.

According to the spokesperson, this license application is under review by the regulator and is “subject to it demonstrating that it is able to meet requirements under the PS Act.”

He added, “MAS has been engaging BAS and expects BAS to immediately begin an orderly suspension of its facilitation of transfers of digital payment token assets between BAS and Binance. BAS will inform its customers of the appropriate arrangements as soon as practicable.”

Binance.sg was quick to dissociate itself from its parent company, Binance Global, pointing out that it’s an independent firm.

“Binance Singapore (Binance.sg) is a separate legal entity from Binance.com with its own local executive and management team and does not offer any products or services via the Binance.com website or other related entities, and vice versa,” it told the newspaper.

In its response, Binance Global, which is led by all-too-controversial Changpeng Zhao, who himself resides in Singapore, stated that it’s “actively working with the MAS to address concerns that they may have through constructive dialogue.”

As CoinGeek reported, Binance has been seeking investment from Vertex Ventures, a subsidiary of Singapore’s sovereign wealth fund Temasek.

And to further strengthen its theatrics of commitment to compliance, the exchange appointed a former director of corporate finance at the MAS as the CEO of Binance Singapore.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—a from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple and
Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.