Singapore to Follow Up With Binance in Wake of Global Crackdown

Chanyaporn Chanjaroen, Bloomberg News

The Binance Markets Ltd. cryptocurrency exchange trading app arranged on a smartphone in London, U.K., on Monday, June 28, 2021. Binance Markets Ltd., an affiliate of top global crypto bourse Binance, was told by the Financial Conduct Authority it has until the evening of June 30 to confirm it has removed all advertising and financial promotions, according to the authority’s register. Photographer: Jason Alden/Bloomberg , Bloomberg

(Bloomberg) -- Singapore’s financial regulator said it would follow up as required with the local unit of Binance Holdings Ltd. after its parent company came under scrutiny from authorities around the world.

Binance Asia Services Pte. has a grace period during which it can operate in the city-state while the Monetary Authority of Singapore reviews its application for a license to provide digital payment token services, the regulator said Thursday. A number of other companies are undergoing a similar assessment and can continue their operations in the meantime, a MAS representative said in response to queries from Bloomberg.

“We are aware of the actions taken by other regulatory authorities against Binance and will follow up as appropriate,” the authority said.

The cryptocurrency sector is in the midst of a regulatory crackdown as authorities from China to the U.S. grow concerned about its potential to facilitate money laundering and fraud. In one of the most significant actions to date, an affiliate of Binance Holdings -- the top global crypto bourse -- was banned from doing regulated business in the U.K.

The parent company is being probed by several agencies in the U.S., Bloomberg News has reported, and Japan’s Financial Services Agency warned that it offered crypto services without registration.

Binance is seeking a license that would legitimize its operations in Singapore, along with crypto firms including New York-based Gemini Trust Co. LLC and Hong Kong-based Crypto.com.

Binance Asia Services is a separate legal entity and does not offer any products or services via the Binance.com website or Binance Markets Ltd., the company said by email. The Singapore entity is backed by Vertex Ventures Holdings, and focuses on growing the local blockchain ecosystem and servicing users here, it said.“It is important to note that we take a collaborative approach in working with regulators and we take our compliance obligations very seriously,” Binance said in the email. “We are actively keeping abreast of changing policies, rules and laws in this new space.”

The MAS said it is applying “robust standards” in assessing applications, and considers a number of factors such as the applicant’s ability to implement strong measures against illicit flows, as well as fitness and propriety of shareholders and key appointment holders.

Many applicants dropped out of the race as they were unable to meet the standards laid out under last year’s Payment Services Act, the MAS said.

Applicants will be “subject to close scrutiny in the licensing process and ongoing supervision by MAS,” the regulator said.