Binance, the world’s largest crypto exchange, is reportedly trying to secure cryptocurrency services in Singapore again. The custodial arm of the exchange plans to apply for a permit in order to start providing crypto services in Singapore.
Although Singapore has been fairly well disposed toward crypto in the past, the country had posed certain challenges for the exchange. Just a year ago, in February, the crypto exchange shuttered operations in Singapore.
Binance Asia Services, which happens to be the Singapore affiliate of Binance, had to suspend operations after withdrawing its local license application in December 2021. The reason stated by the crypto exchange was nothing more than “strategic, commercial, and developmental” issues.
However, the custodial arm of the crypto exchange, now called Ceffu, after Binance decided to rename it from Binance’s Secure Asset Fund for Users (SAFU), shall be applying for the Capital Markets Service license with the Monetary Authority of Singapore (MAS).
Athena Yu, vice president at Ceffu, stated:
Given the city’s reputation in innovation, good corporate governance and a strong regulatory framework, it’s no surprise that institutional investors are attracted to set up shop here.
The MAS previously imposed regulatory pressure on Binance, which caused the crypto exchange to exit the market when it decided not to renew Binance’s license in 2021 as it failed to incorporate the required changes, according to the regulator.
Jarek Jakubcek, the head of law enforcement training at Binance, mentioned that after the license was revoked, the exchange had undergone many changes and now meets the regulator’s requirements.
Although the exchange paused services to retail investors in Singapore due to pressure from MAS, Binance still continued to offer crypto services to institutional clients from Singapore.
Binance Faces Opposition From U.S. Watchdogs
Market watchdogs in America have also imposed stringent regulatory pressure by opposing a proposal made by the exchange. Binance.US, the United States arm of the crypto exchange, planned to acquire the assets of bankrupt crypto lender Voyager Digital.
However, it has come to light that this acquisition plan could violate certain local securities laws. This heightened scrutiny comes after the collapse of FTX, and at the moment, Binance.US is seeing opposition from U.S. regulators with regard to this deal.
The U.S. Securities and Exchanges Commission has also cracked down on the BUSD stablecoin which is issued by Paxos. Paxos was ordered to stop the minting of new BUSD tokens, which has caused the market cap of the stablecoin to fall by around 40%.
Safeguarding Customers
Last year, in October, the MAS announced a proposal to expand its scope in order to better safeguard consumer interests. This plan was up for feedback from the prominent industry players until the end of last year.
At the moment, reports suggest that it will be months before new rules relating to Singapore’s consumer-centric crypto structure come into effect. This particular framework will not allow companies to lend out the digital coins that are owned by retail customers, and it will also mandate that client assets are maintained separately from company holdings of any form.
Furthermore, the MAS has declined credit lines to fund crypto purchases. In the case of digital asset firms, they are required to administer assessments for retail investors before the clients wish to trade their virtual tokens.
