MAS demands crypto exchange Binance cease operations

The Monetary Authority of Singapore has called on crypto exchange Binance to cease operations in Singapore or risk breaking the law, dealing another blow to the crypto trading giant, which is grappling with regulation worldwide.

Binance “may be in break of the Payment Services Act”, a spokesperson for the MAS confirmed to Central Banking on September 7.

The crypto exchange is accused of “carrying on the business of providing payment services to and soliciting such business from Singapore residents without an appropriate licence”, the MAS said.

The central bank has also placed binance.com on its investor alert list, where consumers are warned against using services from the unregulated financial service operators.

After Bloomberg first reported the stance of the MAS on September 1, Binance reacted by shelving some of its product offerings in Singapore.

The platform will no longer offer Singapore dollar trading pairs and payment options in the country to “remain complaint to local regulation”, Binance said in a blogpost published on September 5.

It also decided to remove the apps from the Apple and Google mobile stores in Singapore. All changes will be effective from September 9.

“There may be more restrictions on SG users on binance.com. We don’t make the rules, MAS does, we follow,” co-founder and chief executive Zhao Changpeng said on Twitter.

Tightened grip

Before the MAS issued the warning, both Binance and Binance Asia Services (BAS), the separate arm of the former in Singapore, operated in the country.

As the crackdown unfolded, BAS said it would ban users from moving digital assets from binance.sg to binance.com. The ban will come in force from September 13.

BAS is a “local crypto exchange” and operates independently from Binance, the firm said, adding that the company is fully committed to obtaining a licence from the MAS.

Singapore regulates crypto trading under the Payment Services Act, which came into effect last January. Crypto exchanges are required to seek a digital payment token (DPT) provider licence.

BAS swiftly submitted a licence application one month after the rule kicked in, co-founder Zhao Changpeng told Bloomberg last February. The MAS handed the first crypto exchange licence to an Australian operator in August.

Under the transition arrangement, BAS is exempted from holding a licence and allowed to continue to provide crypto services so long as its licence application is under review. This review is ongoing, the MAS spokesperson said.

The tightened regulation came just weeks after BAS appointed Richard Teng as the chief executive of Binance Singapore.

Teng spent more than a decade with the MAS as a director and served as the chief regulatory officer of Singapore Exchange.

Cold shoulder

Binance has increasing run up against regulators as it expands its global footprint. In the UK, the Financial Conduct Authority concluded last month that it is “not capable” of properly supervising Binance Markets Limited (BML), the UK arm of Binance.

The FCA is particularly concerned with the fact that Binance offers “complex and high-risk financial products”, posing a “significant risk” to consumers, the notice released on August 25 said.

BML failed to answer questions about stock tokens, a product Binance halted recently, wider products offering by binance.com as well as its global business model, the FCA said.