Global crypto exchange Binance has backed out of its initial application for a Singapore license to operate, following an announcement that it will be refocusing its strategies for the country as its "blockchain innovation hub."
Binance Asia Services—the exchange’s Singaporean entity—will head this mission with the goal of developing the global blockchain ecosystem. The news follows Binance's current challenges with regulation, in which they ran into issues with the Monetary Authority of Singapore (MAS). Binance said in a statement that it will “co-operate fully with MAS and other regulatory and governmental bodies,” but is withdrawing its own application for a license until all options have been exhausted.
“Singapore is a vibrant fintech hub and Southeast Asia is an important region for us. We plan to make further investments in the region with Singapore as one of the centers for technology, research and development,” shared Richard Teng, CEO of Binance Singapore.
Binance CEO Changpeng Zhao clarified on Twitter that despite the withdrawal of the application for a license, Binance’s presence in the country will remain unhindered, given how it has made a “sizable investment” into HGX, a regulated exchange operating in Singapore.
Clarification. Binance made a sizable investment into regulated exchange HGX last week. This investment made our own application somewhat redundant. We will continue to work through our partners to grow the crypto industry in Singapore. Onwards.https://t.co/D9oywGEavV— CZ 🔶 Binance (@cz_binance) December 13, 2021
Earlier in August, Binance Asia Services was given temporary exemption from license requirements under Singapore’s Payment Services Act. This exemption has since expired in November.
“We always put our users first, so 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,” Teng adds.
The exchange will continue to provide services in Singapore, but it will likely face compounded difficulties without a license. As Binance has withdrawn its application for Singaporean licenses, it may also be withdrawing from the country's Blockchain Regulatory Sandbox. The sandbox acts as an incubator for blockchain innovation and was created by MAS in November 2017.
With the sandbox in place, Binance's regulatory status was placed under the MAS' review pipeline, except that being protected from within the sandbox gave no guarantees to the exchange that it will be provided with a proper license.
“We are aware of the actions taken by other regulatory authorities against Binance and will follow up as appropriate with the applicant,” an MAS spokesperson stated.
According to the MAS, a significant number of crypto and blockchain firms that operate in a similar fashion to Binance were also rejected on its list. Post the rejection, Binance was placed on the MAS' Investor Alert List, a collection of entities identified by the authority as non-compliant and unlicensed.
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