Binance Faces Regulatory Pressures from Cayman Island Financial Authorities
Leading cryptocurrency platform, Binance, has come under the scrutiny of regulatory authorities in British territory, Cayman Islands, due its operations in the country. The country’s principal financial body, Cayman Islands Monetary Authorities (CIMA) has claimed that the crypto platform has not been issued a license to operate in the country. Following, the regulatory body put out a warning to the public informing them to be wary of the platform’s operations.
Binance and its subsidiaries have been feeling the heat of regulatory pressures lately prompting it to close operations in some regions. Its latest run-in with Cayman’s CIMA as it relates to regulations puts its operations at risk in the country. Users of the platform may then be affected.
Binance Counters CIMA’s Position
However, Binance has countered CIMA’s position saying it has conducted its operations in accordance with existing regulations. The crypto platform also claimed that it has carried out its operations without control from a central authority. According to Binance’s spokesperson, the platform it does not operate crypto trading operations in the country.
Further checks reveal that the principal arm of the platform, Binance Holdings is registered as a business entity in Cayman Islands. In contrast, CIMA added that any firm which hopes to run a crypto platform service in the country must meet at least one of the two requirements- it must complete registration and receive a license in line with extant Act or be an existing regulated firm with the first requirement waived by the principal body under the Act. The Act became effective in January 2021.
Binance Faces Heavy Pressure from Other Regulatory Bodies
Binance is also being investigated by the Singaporean financial body who said it will scrutinize the application for a license from Binance Asia Services Pte again as its principal arm, Binance Holdings Ltd is under pressure from some countries. The UK’s Financial Conduct body (FCA) enforced a ban on the crypto platform last month for it to close shop in the country. In light of another ban in Ontario, it advised crypto traders in the region in a subsequent notice to cancel their active positions by end of the year.
While that went on, in a separate development, Japanese financial authorities warned that the platform still offered crypto-based services to users in the country without obtaining a license for its operations. Binance put out a notice denying the veracity of the Japanese FSA’s claim. The US has also been on the neck of the platform, with an investigation launched into its operations in May. With the regulatory pressures on global crypto operations mounting, this may see the crypto market go on a spiral, downhill despite the prevalent optimism.
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