Binance exchange, the number one crypto exchange firm in the world has been under fire from regulators across different countries.
From calling it’s operation illegal to allegations it does not have the necessary approval to operate in certain countries, many regulators have alleged the exchange firm of different things leading to multiple crackdowns the exchange now has to deal with.
Most recently it was Hong Kong that issued its warning to the exchange firm as the regulators pointed that no entity in Binance Group is licensed or registered to conduct regulated activities in the city.
Although, Changepeng Zhao, Binance CEO has written an open letter to address the regulatory issue faced by the firm he spoke more on how the firm aims to settle its differences with regulators globally.
While speaking on Friday at the “Redefine Tomorrow” event organized by SCB 10X, Zhao said that the crypto space is now “relatively heavily regulated.”
To that end, Binance exchange has to make a “big pivot from a technology startup into a financial services company,” said Zhao.
Crypto now is “very much understood as a financial asset type, we just got to treat it as such, and we have got to run the company as such,” he said.
And given increased regulatory attention, Binance is also stepping up its compliance efforts, said Zhao.
“We are hiring many traditional compliance people, also ex regulators” to improve Binance’s communication with regulators, he said. He acknowledged that communicating with regulators is currently not one of Binance’s core strengths.
Seven countries to have crackdown on Binance exchange and why
Back in June, Japan’s Financial Services Agency (FSA) issued a warning to the exchange that it operates in the country without permission.
The exchange has been warned by the same regulators in 2018. That year, CEO Changpeng Zhao spoke out against the warning as he said that the exchange was in “constructive dialogues” with the regulator over the matter.
The allegations in 2018 forced Binance to move its headquarters back then from Japan to Malta.
Binance is yet to respond to last month’s allegations by the FSA, however, the exchange announced in 2020 that it would phase out its operation in Japan. It is yet to act on that but has been served again a notice that it operates illegally in Japan.
The situation with Canada is quiet different from what Binance experienced in other countries.
Financial regulators in Ontario began targeting crypto exchange firms in the region. Ontario Securities Commission’s (OSC) issued notice to prominent crypto platforms like Poloniex, Bybit and KuCoin and began taking legal actions against them alleging that they are operating as unregistered platforms.
Before the OSC came for Binance exchange, the firm announced that it was pulling out of the market and would stop serving Ontario residents.
Italy on Thursday joined the crackdown against cryptocurrency exchange Binance, the world’s largest.
The Consob financial regulator said Binance Group companies were not authorized to provide investment services in the country.
The warning comes in wake of a class-action lawsuit Binance faces from a group of Italian and other foreign investors.
Binance in response to the warning however said it does not affect their service on Binance.com. The spokesperson noted that they take a collaborative approach in working with regulators and they take compliance obligations very seriously.
The Cayman Islands’ financial regulator began scrutinizing Binance earlier this month.
“Binance Group and Binance Holdings Limited are not registered, licensed, regulated or otherwise authorized by the Authority to operate a cryptocurrency exchange from or within the Cayman Islands,” the islands’ Monetary Authority announced.
The authority said Binance Holdings Ltd. and Binance Group were not subject to any regulatory oversight by itself and it is investigating whether any of Binance’s businesses fall within its jurisdiction.
Binance’s woes continue as Thailand’s Securities and Exchange Commission (SEC) filed a criminal complaint against the crypto exchange for allegedly operating in the country without a license.
This is in line with the country’s stringent regulation against cryptocurrencies.
Regulators said Binance had failed to meet a deadline for responding to an earlier warning, according to an announcement on the SEC’s website.
Hong Kong SFC announced on Friday that the exchange is not licensed or authorized to offer any kind of services in the city.
This is despite the myriad of crackdowns Binance has faced over the past month.
Hong Kong’s Securities and Futures Commission (SFC) compiled to the firm’s woes as it issued the notice to the number crypto exchange.
Binance crackdown by Hong Kong is tied to the exchange not licensed to sell “stock tokens” in the city. However, the firm offers the product.
The SFC said these were likely to be “securities” under Hong Kong rules, and so it may also be an offense to offer them to the Hong Kong public without its authorization.
The crackdown on Binance exchange escalated when the UK Financial Conduct Authority said Saturday that Binance Markets Limited, the U.K. division of Binance, “is not permitted to undertake any regulated activity in the U.K.”
The regulator also warned UK residents to desist from investing with the crypto firm.
After the FCA warned that Binance operates illegally, it has been several misfortunes for the firm. Partners and other friends to the crypto firm has abandoned it with many cutting ties to avoid similar fate with the regulators.