Binance received yesterday (September 2) an order from the Monetary Authority of Singapore (MAS) to stop providing payment services to Singapore residents.
A representative from MAS reportedly said that the US crypto exchange which operates Binance.com, is providing unlicensed payment services in breach of the payment services act.
The company has since been placed on MAS’ Investor Alert List to warn consumers in Singapore that Binance is not regulated or licensed in Singapore to provide any payment services.
“Binance is required to cease providing payment services which are regulated under the Payment Services Act to Singapore residents and cease soliciting such business from Singapore residents,” said an MAS representative.
However, Binance Asia Services (BAS) — a separate entity responsible for crypto exchange platform Binance.sg — has applied for a licence under the Payment Services Act.
Currently, BAS is exempted from holding a licence for providing digital payment token services following transitional arrangements under the Act.
The exemption applies to operators that had been conducting regulated business before the Payment Services Act was put in place on 28 January 2020. Entities are allowed to continue providing services while their licence applications are processed, and the exemption will last until the approval, rejection, or withdrawal of the licence application.
MAS said that it is communicating with Binance Asia Services, which is expected to “immediately begin an orderly suspension of its facilitation of transfers of digital payment token assets” with Binance.
Binance Asia Services will inform its customers of relevant arrangements soon.
Singapore is not the first to take action against Binance
This clampdown by MAS is not the first — there has been a series of regulatory crackdowns on Binance’s operations worldwide.
Binance was warned by German financial regulator, BaFin, in April this year for a possible violation of security rules over the launch of its stock tokens trading without having published an investor prospectus.
The United States Justice Department and Internal Revenue Service investigated Binance in May this year amid concerns that cryptocurrencies are used to conceal illicit transactions, such as theft and drug deals. There are also concerns regarding tax evasions by Americans who have profited by betting on the meteoric rise of the crypto market.
In June this year, Binance’s British arm, Binance Markets was banned from conducting regulated business in the United Kingdom. There are concerns that Binance Markets was not proactive in preventing financial crimes on its platform, such as money laundering.
India’s money laundering agency also launched an investigation into the company for a potential violation of foreign exchange regulations.
Binance was also warned by Japan’s Financial Services Agency on June 25 for not being registered to do business in the country.
Other countries and cities that joined the global crackdown against Binance include Hong Kong, Italy, Malaysia, and Thailand.
What does this mean for Binance customers?
Binance.com is reported to be in talks with the Singaporean authorities to address these concerns.
They said in a statement, “Binance.com takes a collaborative approach in working with regulators in navigating this emerging industry and we take our compliance obligations very seriously.”
Meanwhile, Binance.sg responded saying the move by MAS will not directly impact its services, stressing that it is a separate legal entity from Binance.com.
Binance Singapore maintains that its only focus is on growing the cryptocurrency ecosystem locally and providing service to its Singaporean users.
Featured Image Credit: WIRED