Major cryptocurrency exchange Binance has made it to Malaysia’s naughty list, for operating in the country without authorisation.

Operating without authorisation

The Securities Commission Malaysia (SC) has added the cryptocurrency exchange to its list of unauthorised entities. Under Malaysian law, to operate in the country cryptocurrency exchanges must register as Digital Assets Exchanges with the SC. 

Applicants are given nine months, from the initial filing, to meet the SC’s regulatory requirements. However, thus far only three exchanges – Luno, Sinegy, and Tokenize – have been fully approved. As we previously reported, in June 2020, the Global Stock Exchange (GSX) Group has submitted an application for a license to launch a bespoke digital securities exchange in the country, which has been conditionally approved. 

In March this year, Binance announced it intended to use Malaysia as the Southeast Asian testbed for its crypto debit card. At press time (17 July 2020), Binance was still supporting the Malaysian Ringgit. 

Last month Binance was also scolded by the Brazilian securities watchdog, which prohibited the platform from offering Bitcoin (BTC) futures contracts in the country.

Where exactly is Binance based and regulated?

Though many have assumed Binance is based in Malta, in February 2020, the Malta Financial Services Authority (MFSA) put out a statement saying it had not authorised Binance to operate in the cryptocurrency sphere, and therefore the company was not subject to its oversight. 

However, people can be forgiven for thinking the exchange is based in Malta given the frequent coverage in Maltese press that refers to the business as “Malta-based”, the fact that the company signed a memorandum of understanding with the Malta Stock Exchange, regarding the launch of a new security token digital exchange, in September 2018. And, then of course, there’s the fact that Binance CEO Changpeng Zhao has previously said he was invited to Malta by the government to look at an upcoming crypto bill.  

Heck, even the Wikipedia entry for Binance lists it as Malta-based.

Indeed, reports suggest the company is actually registered in the Cayman Islands and the Seychelles. In June, data from blockchain analysis company Crystal, which classed Binance as a Seychelles-based, showed the country handled more BTC than any other country during 2019.

AYO.NEWS says:

In Binance’s defence, with the global regulatory patchwork that now exists, it must be almost impossible to stay technically legitimate in all jurisdictions. And, the fact that so far only three crypto exchanges have managed to get approval from the Malaysian Securities Commission would suggest the process itself may be experiencing problems or delays. We’re sure they will get things ironed out before long.

Regarding where Binance is based, CEO Changpeng Zhao (CZ) has made it very clear that he doesn’t believe in centralised working, or “fixed offices”, and the company obviously has workers and operations scattered all over the world. 

As for the Malta connection, we’d hazard a guess that the Maltese media, encouraged by local politicians, has just been so enthusiastic about their perceived success as ‘Blockchain Island’ that they latched onto Biance’s interest in the jurisdiction and ran with it. 

Staying with Binance, earlier this week the company announced the European launch of its Swipe-powered crypto debit card. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

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