Regulators tightened the regulatory noose on Binance in 2021 but with regulatory clarity, 2022 might turn out to be promising
2021 was a harsh year for Binance from a regulatory perspective. Regulators around the world applied some level of restriction and demanded compliance. Some regulators proceeded to list Binance in their ‘Investor Alert List’ as an entity that is not licensed to carry out regulated activities.
Banks and financial institutions started to restrict deposits and withdrawals to the platform’s local bank account as a result. This led to the departure of users to other licensed crypto exchange platforms.
Binance has been operating from an incorporated company in the Cayman Islands known as Binance Holdings Limited. The entire operation of Binance was not headquartered in a particular jurisdiction.
Binance was forced to adopt a different approach as local regulations started to apply to crypto assets. On Binance’s fourth anniversary, its Chief Executive Officer (CEO), Changpeng Zhao (CZ) outlined the platform’s aspiration to meet the regulatory challenges. One of the steps identified was to localize Binance’s operations.
The following is a recap of the regulatory efforts and challenges in 2021: –
US investigator probes Binance Holdings Limited for insider trading and market manipulation.
Binance received approval from Canada to operate a Money Services Business (MSC).
The Ontario Securities Commission (OSC) issued a statement that Binance is not registered under securities law in Ontario on December 30.
The Financial Conduct Authority (FCA) said Binance’s U.K. affiliate was operating without approval.
Banks and financial institutions halt deposits to Binance after the FCA’s consumer warning.
Binance Markets Limited, Binance’s UK arm announces that it has complied with all of FCA’s requirements.
Binance announces plans to open an office in the United Kingdom and plans to operate as a fully licensed and fully compliant platform.
Binance hires Martin Bruncko as its Executive Vice President to lead its compliance efforts in Europe.
Binance eyes France as a ‘natural choice’ for its Europe expansion plans.
Binance restricts its services in Singapore days after the Monetary Authority of Singapore (MAS) placed Binance on its ‘Investor Alert List’.
Thai’s Securities and Exchange Commission (SEC) filed a criminal complaint against Binance, accusing it of operating a digital asset exchange without a license.
Malaysia’s financial regulator demanded a complete halt to Binance’s services to Malaysians.
Long and Winding Road
The road to compliance is a long and winding one. Binance has adopted an inclusive approach towards regulations. In a recent Frequently Asked Question (FAQ) series published on Binance’s blog, CZ declares that Binance welcomes mutual cooperation with regulators worldwide to structure a compliance framework for centralized exchanges.
Binance’s effort to woo regulators worldwide would likely bear fruits in 2022. There may be further conditions imposed but it is unlikely that these conditions will be crippling. Governments around the world are starting to realise the need to embrace the crypto revolution. The best foot forward is to ensure that a responsible and compliant central exchange is a friendly party.
Source: BSC News
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