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Binance.sg to shut on Feb 13: Here’s all you need to know about the S’pore crypto exchange

binance singapore

Binance is a cryptocurrency exchange that was founded in 2017 by Changpeng Zhao, a developer turned billionaire. He made his riches from creating Binance back when the crypto scene was at its infancy.

The company has since grown to be a major player in the crypto space. In 2019, it launched its Singapore crypto exchange, enabling users to purchase and sell crypto assets like Bitcoin using the Singapore dollar through the fast and secure transfers (FAST) electronic funds transfer system.

The firm’s Singapore arm, Binance Asia Services, was launched in the same year in 2019, backed by Temasek-unit Vertex Holdings.

Binance Asia Services was exempt from holding a licence under the Payment Services Act for the provision of digital payment token services, as authorities wanted to allow for innovation in the crypto space for crypto companies. The exempt worked while its licence application was being reviewed.

Image Credit: Tech Crunch

Fast forward to Dec 2021, in a sudden announcement, Binance said it has withdrawn its licence application and that it was exiting Singapore. The move stumped investors and observers who never thought this would happen.

Investors in Singapore were given a timeframe to exit their positions and withdraw their assets.

What is Binance?

Binance is one of the world’s largest exchanges in the crypto industry. It offers a wide range of services to users across the globe – from crypto spot and derivatives trading to tokenised versions of stocks.

According to Glassdoor, the company has grown to hit an annual revenue of almost US$1 billion. In 2021, it generated at least US$20 billion of revenue, a Bloomberg analysis of its trading volume and fees showed.

The Binance app / Image Credit: Bloomberg

Its own cryptocurrency, Binance Coin, is the fifth-biggest in the world in terms of market cap. Its company website states that it has over 2,000 employees in more than 20 locations worldwide.

Binance’s corporate structure is said to be opaque, with its holding company widely reported to be registered in the Cayman Islands.

Regulatory issues

Binance has been banned by some countries from crypto trading, while other countries have issued warnings to consumers on the exchange’s products.

In June last year, Japan’s regulator said Binance was operating in the country illegally. Meanwhile, Germany’s watchdog said in April the firm was at risk of being fined for offering tokens connected to stocks.

Changpeng has been attempting to quell regulators’ concerns on anti-money laundering and terrorism financing activities on the platform since last year.

Image Credit: Binance

The Binance CEO had highlighted the exchange’s growth potential if it were to be regulated. He said that despite the rapid development in digital capital, no more than two per cent of the world’s population use cryptocurrencies, and the key to their growth lies in gaining user trust.

By being cooperative with authorities, the crypto industry will benefit as it allows for an opening up to the mass market. Setting the foundation for crypto rules properly will allow the broader population to feel safe to participate in crypto.

“In order to attract those 98 per cent of people, we need to be regulated.”

Closure of Binance.sg

Therefore it came as a surprise to many when Binance.sg withdrew its Monetary Authority of Singapore (MAS) licence application in Dec 2021. The firm also said that it’ll wind down operations and close by Feb 13, 2022.

Some said that the reason behind that could be other regulatory issues Binance had with MAS. In Sept 2021, Binance was ordered to stop services for its main crypto exchange Binance.com in the country and was placed on an investor alert list.

On its decision to cancel its licence application, the crypto exchange said that it weighed “strategic, commercial, and developmental” considerations.

“Our decision to close Binance.sg was not taken lightly. Our immediate priority is to help our users in Singapore transition their holdings to other wallets or other third-party services,” Richard Teng, CEO of Binance Singapore said during the announcement.

Image Credit: Binance.sg website screengrab

With the closure of the trading platform, Binance.sg users were notified via email on the next steps to take. The users were told to close all open positions and withdraw their Singapore dollar and cryptocurrency assets by the closing date.

Binance’s failure to launch a regulated exchange via Singapore also negated hopes of the Southeast Asian city-state becoming its global headquarters.

This is seen from an interview with Reuters back in October, where Binance CEO Changpeng said that the company was considering other countries as its headquarters – Ireland, along with France, and another unnamed European city.

Refocusing its Singapore strategy

However, Binance has not completely given up on Singapore.

In a Tweet in December, Changpeng said that the company had made a sizable investment (18 per cent) in regulated exchange HGX and it’ll continue to work through partners to grow the crypto industry in Singapore.

HGX has a Recognised Market Operator licence. It currently trades shares in private companies as well as tokenised securities including rare whisky, art and real estate.

The move to invest in a local regulated exchange shows a change of tactics and a redeployment of its manpower resources from the original plans. According to Hazel Watts, a Binance spokeswoman in Singapore, all local employees will join the firm’s global operations and continue to contribute to the company.

Image Credit: MAS

The crypto exchange also said that it will refocus its Binance Asia Services operations in Singapore into a blockchain innovation hub to help develop the global blockchain ecosystem.

According to LinkedIn, Binance currently hires hundreds of Singapore-based staff. The portal indicates that Singapore employees are the fifth-largest in quantity, after India, Nigeria, Indonesia, and the US.

The firm is still hiring new blood to join its Singapore-based team, and is offering roles like Growth Manager, Data Analyst, and Commercial Counsel.

Middle East the new global HQ? 

Binance has been increasing its interest in the Middle East ever since it withdrew its licence application in Singapore.

In December last year, it sealed a deal with Dubai authorities to build a regulatory and legislative framework for virtual assets.

Image Credit: CNN

The crypto exchange will collaborate with the Dubai World Trade Centre Authority to build a new international virtual assets ecosystem. This is as Dubai aims to license crypto exchanges, blockchain, and distributed ledger technology firms, as well as digital currencies and assets in the city in the coming months.

News reports said that Changpeng bought a home in Dubai in a show of support for a city he coins as “very pro-crypto.” He also met with key officials in the virtual assets and blockchain industry there.

Next steps for Binance

Key resources are currently deployed to the Middle East.

Richard Teng, who was Binance Singapore’s CEO, is now the crypto bourse’s regional head of the Middle East and North Africa (Mena), according to his LinkedIn profile.

Image Credit: SatellitePro ME

Richard had joined Binance in August, but his stint as its Singapore CEO only lasted a few months as Binance withdrew its application for a Singapore crypto permit, ending its attempt to be a licensed exchange in the country.

The fact that Binance reassigned Richard to lead other markets shortly after it scrapped its Singapore permit attempt shows that it continues to be serious in its regulated exchange plans.

The former Singapore CEO has years of experience in dealing with and navigating market regulations, having been the Chief Regulatory Officer at the Singapore Exchange for more than seven years and having spent 13 years working on corporate finance with the MAS.

Richard also has six years of experience as CEO for the Financial Services Regulatory Authority at Abu Dhabi Global Market.

Image Credit: UNLOCK Blockchain

In addition, Zhaopeng is quickly becoming a fixture in the United Arab Emirates, as seen by his meetings with royalty and key officials in Abu Dhabi who are just as eager to bring his crypto exchange to the country. This shows efforts from the Binance founder to build relations and in establishing the business in that region.

Although currently on the jobs front, the crypto exchange does not appear to be hiring an army of workers in Abu Dhabi just yet. But it’s only a matter of time this will change as Binance grows in the new market.

Featured Image Credit: Coinape, Coindesk

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