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Binance Singapore affiliate says will withdraw licence bid, shut local platform

Binance affiliate says will withdraw Singapore licence application
Binance affiliate says will withdraw Singapore licence application   -   Copyright  Thomson Reuters 2021
By Reuters

By Chen Lin and Alun John

HONGKONG – The Singapore affiliate of Binance, one of the world’s largest cryptocurrency exchanges, said on Monday it will withdraw its local licence application and wind down its digital payment token business in the broadly crypto-friendly city-state.

The company, which has come under growing scrutiny globally, did not give a reason for its decision beyond “strategic, commercial and developmental” considerations and said it would refocus the local unit’s operations on becoming a blockchain innovation hub.

Governments and financial watchdogs around the world have intensified scrutiny of the cryptocurrency industry this year, posing a challenge to exchanges that have thrived in a mostly unregulated environment.

Singapore is a popular location for cryptocurrency firms due to a comparatively clear regulatory and operating environment and is among the forerunners globally in developing a formal licensing framework.

Binance’s Singapore unit was one of well over 100 cryptocurrency companies to apply for a license to operate in Singapore and had been allowed do business while its license request was being processed.

Singapore issued its first licences this year, including to a unit of southeast Asia’s largest bank DBS, however dozens of others have been withdrawn or rejected.

Binance said its Singapore platform for trading fiat and cryptocurrencies will close by mid-February. In September, the company said that because of local regulation, users in Singapore would not be able to trade on its global platform.

A spokesperson for the Monetary Authority of Singapore said Binance Asia Services had provided them with a plan for orderly cessation of its regulated payment services which “will allow sufficient time for customers to seek alternative providers, or, if they wish, to liquidate their holdings.”

“I think this (Binance’s withdrawal of its application) signifies again Singapore’s licence regime is quite stringent,” said Chia Hock Lai, co-chairman, Blockchain Association Singapore.

“Having said that, Binance also stated that Singapore will remain as their blockchain innovation hub, so it is still consistent with the narrative that Singapore is a very important blockchain hub.”

Financial regulators in Hong Kong, Britain, Germany, and Japan among others have targeted Binance, raising issues such as consumer protection and anti-money laundering checks. Some have banned the platform from certain activities, while others have warned consumers that it was unlicensed to operate.