Published by Bitboycrypto.com | Catoshi Nakamoto on June 2, 2021
The day has finally come where Binance is being targeted by several countries’ regulators for operating an exchange without proper oversight in their eyes, which allows money laundering and illegal futures trading.
Binance has recently been put under scrutiny by the U.S., UK, Singapore, Thailand, Canada, Japan, India, and now they can add the Cayman Islands to that list. This all started with the U.S. who launched a probe into Binance Holdings Ltd. by the Justice Department (DOJ) and Internal Revenue Service (IRS), as Bloomberg reported. For the reader’s knowledge, Binance is incorporated in the Cayman Islands and has an office in Singapore, however, the company has always operated decentralized and no one location is known to be Binance’s actual HQ.
The Cayman Islands Monetary Authority (CIMA) has stated in a press release that despite Binance being incorporated in the territory, it is not licensed by the regulator to operate a crypto exchange business from or within the Islands.
“The Authority is currently investigating whether Binance, the Binance Group, Binance Holdings Limited or any other company affiliated with this group of companies has any activities operating in or from within the Cayman Islands which may fall within the scope of the Authority’s regulatory oversight,” the CIMA said.
CIMA hasn’t yet accused Binance of any wrongdoing. However, the Cayman Islands is supposed to be where Binance is incorporated.
Meanwhile, the Monetary Authority of Singapore has also announced today that it is reviewing Binance’s application for a license to operate in the country, adding that the regulator will “follow up” with Binance in the future.
Last week, Binance faced pressure from the U.K. Financial Conduct Authority who announced that Binance Markets Ltd., the U.K. division of Binance, “… is not permitted to undertake any regulated activity in the U.K.” Although, this means services such as futures and options, while trading for UK users is still legal. However, other countries have taken a more stringent approach against Binance like Thailand who recently announced through its Securities and Exchange Commission (SEC) that the agency had filed a criminal complaint against Binance. The Thailand SEC has launched a criminal procedure and an investigation for allegedly operating a digital asset business without a license. The authority said that Binance had provided crypto trading services via its website by “matching orders or arranging for the counterparties or providing the system or facilitating entry into an agreement.”
“In so doing, Binance has solicited the Thai public and investors to use its services, either via its website or Facebook Page: Binance Thai Community,” the SEC noted. The regulator mentioned that it previously issued a warning letter to Binance in April, requiring the exchange to submit a written response, but the crypto exchange failed to submit a response within the specified time.
“Only providers who have obtained relevant licenses under the law are allowed to provide services related to digital asset trading, exchange, depository, transfer, withdrawal or any transactions related to digital assets. Violators may be liable to penalties under the law,” the agency noted
India has also opened an investigation into Binance owned Wazirx exchange which stems from a suspected violation of foreign exchange regulations. According to Reuters, the probe was opened after the federal Enforcement Directorate (ED) was looking into a money laundering case that involved Chinese-owned illegal online betting applications.
Japan has also warned the popular exchange Binance that it isn’t registered to do business in its own country.
It’s also worth mentioning that Binance had its chief finance officer Wei Zhou leave the company a month after the probe was announced in the U.S.
Following all of these regulatory challenges by regulators worldwide against Binance, the company has announced that it will be implementing CipherTrace, blockchain analysis Traveler software into its exchange for compliance with Financial Action Task Force’ (FATF) travel rules. Binance.com is at the time of this report still operational with no issues.