Posted 10 months ago | by Catoshi Nakamoto
Last week, Binance received additional warnings from regulators global about its exchange and had a few issues with payment service providers. So much that the number one exchange with trading volume has decided to cease its stock token trading offering only launched months ago.
In a previous report, Bitboy Crypto covered Binance being targeted by the — U.S., UK, Singapore, Thailand, Canada, Japan, India, and even the Cayman Islands where Binance is incorporated.
The newest countries to add to the ongoing list targeting the exchange include — Italy, Lithuania, Hong Kong, Poland, and Malta, i.e. Binance’s former home before it was kicked out in 2020 by the Malta Financial Services Authority (MFSA). Although Binance doesn’t have an official operation headquarters, and it’s operated in a decentralized manner with no one location being it home. It’s worth mentioning that Singapore was where the company had known offices.
In addition to countries issuing warnings or in some cases even criminal complaints against the exchange, Binance has also faced suspension of some of its payment partners as well including — Clear Junction and BCB Group. The exchange has also temporarily disabled sterling pound withdrawals through Faster Payments and euro deposits through SEPA bank transfers.
Payments giants Visa and Mastercard have also affirmed they are monitoring Binance’s regulatory compliance as more regulators issue warnings about the global crypto exchange.
If that’s not enough some banks have even begun blocking Binance transactions mostly in the UK. British banks like Barclays, NatWest, Santander, and UK’s Nationwide building society have reportedly been blocking customers from using their debit and credit cards to make payments to Binance.
Further, the U.S. Department of Justice (DOJ) has demanded federal agencies to stop signing appreciation letters for Binance. Apparently, the exchange has been using these letters as proof they are actively helping the agencies in criminal probes and this bothered the U.S. government. It’s noteworthy that Binance is under investigation by the DOJ and Internal Revenue Service (IRS) on money laundering and tax offense suspicions. The Commodity Futures Trading Commission (CFTC) is also probing the exchange to uncover whether it allowed U.S. citizens to trade unregistered derivatives.
It’s because of these suspensions and recent regulatory pressure that Binance has now started to shift more towards compliance hiring a new Compliance Director Jonathan Farnell with plans to double its compliance team by the end of this year. Binance also recently installed CipherTrace, blockchain analysis Traveler software into its exchange for compliance with Financial Action Task Force’s (FATF) travel rules.
CEO and founder of Binance, Changpeng Zhao, recently penned a letter to the crypto industry on July 9th about “compliance being a journey.”
“Compliance is a journey — especially in new sectors like crypto. The industry still has a lot of uncertainty. We also recognize that with the growth comes more complexity and more responsibility,” CZ wrote.
Even though Binance is facing regulatory heat he stated that “more regulations are, in fact, positive signs that an industry is maturing.” Zhao also reemphasized Binance’s commitment to partnering with regulators and added that the company has grown its international compliance team and advisory board by 500% since just last year.
“We are learning and improving every day,” Zhao wrote, describing Binance’s goal of increasing freedom for a “better human society.” “We firmly believe that our industry will benefit society through the creation of inclusive financial opportunities,” the CEO concluded. Zhao said that the company welcomes “more constructive guidance” to help the exchange grow.
To that end, Binance has now ceased its synthetic stock trading offering for users that it only recently rolled out months ago. This was after a complaint by Hong Kong, expressing that Binance was not licensed to conduct regulated activities like stock trading in the country. A few countries’ regulatory bodies that have issued criminal complaints or warnings related to the activity include — Italy, Lithuania, the U.K., Japan, and Germany.
Hong Kong’s Securities and Futures Commission (SFC) was the latest agency to circulate a warning against Binance’s unregulated stock trading. On Friday, the regulator stated they are “aware that Binance has offered trading services in-stock tokens in a number of jurisdictions and is concerned that these services may also be offered to Hong Kong investors.” The SFC highlighted that “no entity in the Binance group is licensed or registered to conduct ‘regulated activity’ in Hong Kong.”
The commission further expressed that stock tokens are probably “securities” under the Securities and Futures Ordinance arguing that they should be subject to the regulatory arm of the SFC. The SFC added, that “whether in Hong Kong or targeting Hong Kong investors,” selling securities constitute a “regulated activity” and require a license to do so.
Friday, the crypto company announced the immediate ceasing of any stock token trading:
“Today, we are announcing that we will be winding down support for stock tokens on Binance.com to shift our commercial focus to other product offerings.”
The exchange stated the suspension of stock tokens is “effective immediately.” The platform will not support any stock tokens after Oct. 14, 2021 however, investors will be able to hold and sell them over the next 90 days according to Binance’s announcement.
It seems that Binance is attempting to reshape its image after being the go-to exchange for avoiding KYC to trade from for years. However, and you may call this FUD, Binance does have an open case with the U.S. regarding an investigation into Binance Holdings Ltd. by the Justice Department (DOJ) and Internal Revenue Service (IRS.) Despite Binance U.S. being a separate business, It’s unclear if the U.S. entity is tied up in the investigation into Binance Holdings Ltd due to CZ’s own involvement as a founder.
Bitcoin is currently trading at [FIAT: $29,790.73] DOWN -3.5% in the last 24 hours according to Coingecko at the time of this report.