Regulators around the Globe Continue the Intense scrutiny on Crypto, Thai SEC Issues a Criminal Complaint to Binance Exchange

Binance continues its effort to ensure compliance for its crypto-related operations that are racking up massive transactions globally. The Thai Securities and Exchange Commission is the latest regulatory body to hit at Binance.

Time to Regulate

Binance faces yet another obstacle with the regulators, and this time around, it has come in the form of a criminal complaint by the Thai Securities and Exchange Commission (SEC). Under Thai law, crypto exchanges must be licensed, and the government regulator believes Binance is operating a website sans license. The Thai regulation cited is a part of the Emergency Decree on Digital Asset Businesses from 2018, which specifies that digital assets are to be regulated under Thai law.  The official complaint came on Friday July 2nd.


Although a complaint may not necessarily lead to prosecution, it will set in motion the process for an investigation where the Thai Attorney General decides whether there are sufficient grounds to charge. Conviction would lead to a fine with potential imprisonment, or just a fine between $6,200 to $15,500 with a daily fine up to $311.27 (10,000 baht) for each day of continued infringement. There is also a likelihood that a charge may not be filed with the courts, but Binance could be warned and told to comply. The criminal complaint comes after the Thai authorities issued a warning in April and Binance failed to comply in time. 

Regulators worldwide have begun to ensure that operators dealing with crypto assets are appropriately licensed according to the standards of their national laws. Recently, more jurisdictions acknowledged the adoption of crypto assets and have passed accompanying legislation in a general global effort to reign in the industry. Once a nation has a clear regulatory framework, the next step is to ensure that the operators and stakeholders toe the line. 

Two Options Available for Binance

The exchange now has the right people to help respond to the regulators on their payroll as advisors. Binance will likely choose to comply rather than limit its operation. However, application for compliance may be a lengthy process, depending on the requirements.

Aside from Thailand, Binance has been hit with several notices of compliance in the last month.

June 25, 2021 – Binance added Ontario, Canada, under its ‘restricted jurisdiction’ after it was accused of violating provincial regulations. 

June 25, 2021 – The Japan Financial Services Agency (FSA) issued a warning to Binance, claiming that the crypto exchange is not registered to carry out its operation in Japan.

June 26, 2021 – The Financial Conduct Authority (FCA )of the United Kingdom issued a consumer warning against Binance Markets Limited for unlicensed regulated activities in its jurisdiction.

Binance still has options in a situation like this. It can adopt a conservative approach by halting services in these jurisdictions while the compliance requirements are undertaken. However, this may not be a position that its platform users favor. Alternately, immediate steps can be taken to engage with the relevant authorities and ensure compliance will be met while seeking interim permission to operate. 

Source: Strict and harsh enforcements can work against the state and cause losses to its people.  

How Crackdowns can be Counter-Productive 

The enforcement process is always the most controversial part of any regulatory framework. It is often harsh and abrupt. Regulators understand that taking an authoritarian position upon an industry that was previously unregulated but not illegal results in losses to their citizens. Crypto exchanges that have gained worldwide adoption, like Binance, are good platforms to monitor and trace illicit activities.  

The enforcement must come, but it can take the form of consultation, warning, and demand for compliance with a reasonable time frame. Binance took a similar step by partnering with CipherTrace as part of its compliance with the US Treasury ‘travel rule’. Crypto service providers should be seen as partners in crime-fighting rather than as adversaries. 

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